Budget passed for 2015

The Latvian parliament or Saeima rubber-stamped government spending plans for next year on Wednesday, passing the budget by 60 votes to 13.

One of the key features is a steep 18 percent rise in defense spending, with the Defense Ministry budget growing from €214m this year to €252m next year .

Other measures include raising the minimum monthly wage from 320 euros to 360 euros and reducing the rate of personal income tax to 23% from 24%.

Following the world's deepest recession during the economic crisis of 2008-9 when GDP shrank by a quarter, Latvia has in recent years recorded growth figures among the best in the European Union.

This year, GDP is expected to grow 2.9% with 2.8% pencilled in for next year by the Finance Ministry.

Inflation is expected to rise to 2.4% next year from 0.8% this year, though the Latvian Central Bank recently said it expected inflation to pick up at a slower rate than the Finance Ministry.

Unemployment is expected to remain a problem, dropping marginally from 10.8% at the end of 2014 to 10.1% at the end of 2015.

Consolidated budget revenues for 2015 are planned for 8.9 billion euros, with spending at 9.2 billion euros leading to a deficit of 247 million euros, or 1% of GDP.

That would be within the limit allowed for Eurozone countries. Latvia joined the Eurozone at the beginning of this year.

Before the main budget vote, moves by opposition lawmakers to make the government think again about its medium-term spending plans, particularly in the area of education, proved fruitless.

Harmony deputy Nikita Nikiforovs led the opposition effort in a series of interventions including one that tried to increase the €3m euros projected for an increase in teachers' salaries.

The amount was next year was "clearly not enough," Nikiforovs said, as teachers consider the possibility of strike action.

However it was defeated with government representative Karlis Sadurskis describing the effort as "wholly unrealistic".

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