Deficit of Latvia’s state budget of 2023 at 2.4% of GDP, according to EU methodology

Latvia’s state budget last year, calculated according to the methodology of the European System of Accounts (ESA 2010), had a deficit of EUR 931.7 million or 2.4% of GDP, according to the latest data published by the Central Statistical Bureau of Latvia (CSP).

Compared to 2022, the general government budget deficit went down by EUR 821.9 million last year.

In turn, the general government’s consolidated gross debt last year amounted to EUR 17.578 billion, or 45% of GDP. The general government consolidated gross debt in 2023 increased by EUR 1.54 billion or 9.6% compared to 2022. The increase in the general government debt in 2023 was influenced by the issuance of three new Eurobonds.

According to CSP, in 2023, the revenue of the general government sector, compared to 2022, increased by 14.4% and amounted to EUR 16.3 billion, while expenditure increased by 7.7% and amounted to EUR 17.2 billion, of which EUR 400 million was expenditure on support measures to compensate for the increase in energy prices.

Compared to the cash flow data indicated in the annual report of the Ministry of Finance, where in 2023 the consolidated general budget deficit was EUR 1.3 billion, the budget deficit calculated by CSP in accordance with the ESA 2010 methodology is EUR 398.3 million, or one percentage point of GDP less.

The most significant methodological adjustments with a positive impact on reducing the budget deficit to the general government budget were the adjustment of claims against debtors – EUR 377.4 million or 1% of GDP, the adjustment for balancing the flow of foreign financial assistance – EUR 162 million or 0.4% of GDP, Recovery and Resilience Facility and Modernisation Fund correction – EUR 147.7 million or 0.4% of GDP, correction for interest receivable – EUR 39.7 million or 0.1% of GDP, correction for undistributed contributions to the single tax account – EUR 38.8 million or 0.1% of GDP, as well as the balance of the Deposit Guarantee Fund – EUR 27.5 million or 0.1% of GDP.

At the same time, adjustments have been made with a negative impact, which increases the budget deficit, on the general government budget, the most significant of which is the balance of state and municipal capital companies reclassified to the general government sector – 162.9 million euros or 0.4% of GDP, adjustment between accrued and paid interest – EUR 71.8 million or 0.2% of GDP, adjustment for liabilities to creditors – EUR 67.5 million or 0.2% of GDP, adjustment for future costs of the second pillar pension scheme funds – EUR 34 million or 0.1% of GDP, as well as tax adjustments using the time offset method – EUR 32.5 million or 0.1% of GDP.

A year earlier – in 2022 – the Latvian state budget, calculated in accordance with the ESA 2010 methodology, had a deficit of EUR 1.754 billion or 4.9% of GDP, in 2021 – EUR 2.331 billion or 7.2% of GDP, but in 2020 – EUR 1.194 billion or 4.1% of GDP.

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Publish date : 2024-10-21 05:13:00

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