According to the provisions of the Stability and Growth Pact of the European Union (EU), by October 15 of each year, EU member states submit to the European Commission and the Eurogroup drafts of the general government budget plan for the following year.
This time, unlike previous years, due to the Saeima elections, the FM prepared the draft of the general government budget plan for 2023, based on the renewed macroeconomic development scenario of the FM and updated fiscal forecasts.
They were developed based on a constant policy scenario, that is, taking into account the fiscal impact of all decisions made, but not taking into account the potential decisions that the next Cabinet of Ministers will make in the context of the 2023 budget.
This year, general government revenue is projected at 35.7 percent of gross domestic product (GDP), spending at 42.7 percent, deficit at 7 percent, and debt at 42 percent of GDP.
Next year, in a scenario in which policies are not changed, general government revenue is projected at 36.1 percent of GDP, expenditures at 39.4 percent, deficit at 3.3 percent, and debt at 43 percent of GDP.
Along with the establishment of the new government, work on the development of the budget for 2023 will continue, as well as the detailed draft of the general government budget plan will be prepared and submitted to the European Commission and the Eurogroup.
However, the timing of the October 1 Saeima elections has complicated the budget adoption process. Current Finance Minister Janis Reirs wasn't even elected to the next Saeima and coalition talks involving new parties are continuing while he tinkers with the existing budget plan. Agreeing on and pushing through a new budget will likely be top of the next administration's agenda, but it will likely want to put its own stamp on spending plans instead of relying on the plans of its defunct predecessor.