Social protection spending up 4.2% last year, but still lowest in Baltics

Provisional data from the Central Statistical Bureau (CSB) show that in 2016 social protection expenditure in Latvia accounted for EUR 3.7 billion and, compared to 2015, it grew by EUR 151 million or 4.2 %.

Expenditure on unemployment rose by 19.2 %, on sickness and heath care by 6.5 %, and on support for families and children by 6.0 %.

The data on social protection expenditure are compiled in compliance with the ESSPROS (European System of Integrated Social Protection Statistics) methodology. The methodology is aimed at compiling internationally comparable information on social protection expenditure directed from state and local government budgets for fulfilling social needs of the population.

In 2016, the most notable rise (of 19.2 %) was recorded in expenditure on unemployment (mainly unemployment benefits and active employment measures). Expenditure on unemployment benefits grew from EUR 102.1 million in 2015 to EUR 116.2 mln in 2016. Expenditure on the State Employment Agency measure Occupational Training, Retraining and Raising of Qualification went up from EUR 3.9 mln in 2015 to EUR 6.8 mln in 2016, which was due to the increase in the number of persons involved in the measure (2 787 in 2015 and 5 316 in 2016).

The second greatest expenditure increase (of 6.5%) was observed in health care. As in 2016 the average size of the payable sickness benefit grew, the expenditure on sickness benefit went up by 18.8 % (EUR 113.5 mln in 2015 and EUR 134.8 mln in 2016), whereas information of the National Health Service shows that expenditure on state-funded medicines increased by 17.2 % in 2016 (EUR 126.6 mln in 2015 and EUR 148.4 mln in 2016).

In 2016, the most notable expenditure decrease was recorded in Housing – of 6.4 %, compared to 2015, which was because to the reduction in expenditure on municipal apartment benefit. Data of the Ministry of Welfare show that the number of municipal apartment benefit recipients has dropped from 33.4 thsd persons in January 2015 to 25.9 thsd persons in January 2016.

In 2016, social protection expenditure constituted 15.2 % of the gross domestic product (GDP), which is 0.3 percentage points more than in 2015 (14.9 %). For comparison, in 2015 social protection expenditure in Estonia comprised 16.4 % of GDP and in Lithuania 15.6 % of GDP.

It is also worth noting that spending on administrative costs increased at a faster rate (5.6%) than the overall 4.2% spending rise, suggesting more could be done to improve efficiency.

The data on social protection expenditure are available in the CSB database section Social Protection.

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