Last year Latvia’s state budget had a deficit of EUR 1.721 billion or 4.4% of GDP, according data from the Central Statistical Bureau of Latvia calculated based on European System of Accounts.
Compared with 2021 the general government budget deficit went down by EUR 676.7 million last year.
The general government consolidated gross debt was EUR 15.947 billion or 40.8% of GDP.
When compared with 2021, the general government consolidated gross debt increased by EUR 1.259 billion or 8.6% in 2022.
The Central Statistical Bureau of Latvia reports that as support provided to overcome Covid-19 consequences ended and with energy resource compensation support appeared, the government sector’s overall expenditures in 2022, as compared with 2021, increased. EUR 900 million was the cost of various Covid-19 related support measures for the national economy, EUR 500 million was the cost of various support measures to help compensate the energy price rise. Revenue, on the other hand, increased by 14%, reaching EUR 14.5 billion.
Additionally, CSP reports that when compared to the State Treasury’s operational data, which indicates that in 2022 Latvia’s state consolidated budget deficit was at EUR 1.5 billion, the deficit calculated by CSP is EUR 270.2 million or 0.7 percentage points higher.
The most significant positive adjustments that reduced budget deficit were adjustments to claims against debtors (data from the State Treasury) – by EUR 202.2 million or 0.5 % of GDP; tax adjustments by using the time adjustment method (data from the Ministry of Finance) – by EUR 53.4 million or 0.1 % of GDP; balance of the Deposit Guarantee Fund (data of the Financial and Capital Market Commission) – by EUR 21.8 million or 0.1 % of GDP.
At the same time, there were also adjustments with a negative effect on the general government budget. These included adjustments to Recovery and Resilience Facility (data of the Treasury) – by EUR 194.2 million or 0.5 % of GDP; adjustments to obligations against creditors (data of the Treasury) – by EUR 121.5 million or 0.3 % of GDP; adjustments for government investments in central and local government enterprises (data of the Treasury) – by EUR 49.6 million or 0.1 % of GDP; adjustments for future payments of the 2nd pillar pension scheme funds (data of the State Social Insurance Agency) – by EUR 41.3 million or 0.1 % of GDP; adjustment for superdividends – EUR 33.1 million or 0.1 % of GDP; adjustment of securities premium in the issue year to ensure recognition of premiums in revenue in the following years until the redemption of securities (data of the Treasury) – by EUR 28.0 million or 0.1 % of GDP; adjustments for balancing foreign financial aid flow (data of institutions involved in administration of foreign funds) – by EUR 21.2 million or 0.1 % of GDP; adjustments for retained contribution into the Single tax account (data of the Treasury) – by EUR 17.9 million or 0.05 % of GDP; adjustment of auctioning rights to use radio spectrum bands (data of the Treasury) – by EUR 12.4 million or 0.03 % of GDP; balance of central and local government reclassified enterprises to general government (CSB data) – by EUR 11.1 million or 0.03 % of GDP; adjustments between accrued and paid interest (data of the Treasury) – by EUR 11.0 million or 0.03 % of GDP.
CSP also notes that the growth of the state debt since 2020 was affected by the measures to combat consequences caused by Covid-19 and the support measures put in place to compensate the recent surge of energy prices.
A year prior – 2021 – Latvia’s state budget had a deficit of EUR 2.398 billion or 7.1% of GDP. In 2020 it was EUR 1.321 billion or 4.4% of GDP and in 2019 it was EUR 178.1 million or 0.6% of GDP.
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