On Friday, the 16th of December, Latvia’s Minister of Finance Arvils Ašeradens, meeting with Executive Vice-President of the European Commission (EC) Valdis Dombrovskis, mentioned that one of Latvia’s biggest priorities now is the preparation of the next year’s budget. The legislative draft is planned to be submitted to the Saeima around the start of February, as reported by Ministry of Finance.
During the meeting they also discussed the financial support provided by the European Union towards economic recovery and overcoming the energy crisis, state budget’s preparation process, as well as fiscal and other financial topics.
«The new government has announced multiple important initiatives and direction that require assistance. To implement planned measures and ensure the necessary changes in politics and resources, we have to create the best possible budget project in accordance with our current ability,» said the minister.
According to the Ministry of Finance, Latvia’s budget plan for 2023 was submitted to the European Commission on the 11th of October after its approval by the Cabinet of Ministers.
It was prepared based on the ministry’s macroeconomic development scenario of August 2022 and September’s approved fiscal outlooks. The European Commission admitted that this technical budget plan project meets fiscal recommendations provided by the European Council even without political changes. During the meeting the minister invited providing the official opinion once the European Commission has received the updated budget plan.
«The European Union supports members states with considerable finances to ensure economic recovery after the pandemic and enhancement of economic resilience after external shocks. The union also provides finances towards efforts to overcome the energy crisis. Latvia has access to nearly EUR 2 billion in the form of grants. It is important to use this support in full. It is also important to continue focused support towards groups of residents and enterprises affected the most,» said Dombrovskis.
«Considering the high inflation and continued interest rate growth, it is also necessary to return to a tighter fiscal policy,»
he said, adding that it is especially important for Latvia, considering the country’s high budget deficit.
At the start of December the Ministry of Finance updated its macroeconomic index outlook for 2022-2025. Considering the dynamics of Latvia’s GDP growth in Q3, as well as the expected slowing of economic growth in Latvia’s main trade partner countries, GDP growth outlook was downgraded to 1.6% for 2022 and 0.6% for 2023.