Finance Minister calls for future spending restraint

Latvian Finance Minister Jānis Reirs said June 28 that even though the general budget deficit was smaller than expected in the first five months of the year, government will have to be restrained when it comes to future spending plans.

According to the data of the Treasury, the consolidated general budget deficit in January-May 2022 was 465.1 million euros lower than in the corresponding period of 2021 and amounts to 165.1 million euros. Taking into account the rapid growth of economic activity and prices at the beginning of the year, the total budget revenue this year was 639.6 million euros or 12.7% higher than in the first five months of last year, while expenditure has grown more moderately at 174.4 million euros or 3.1%.

However, it is worth recalling that a year ago considerable extra costs were placed on the state budget by the Covid-19 crisis and the various emergency measures such as mass vaccination and business support that had to be taken.

"Tax [revenues] are above the plan approved by the government, but expenditure in the general budget is still very high compared to the pre-crisis period... in the near future, politicians need to be particularly prudent and rational in planning public spending," Reirs said, adding that the European Central Bank plans to gradually raise interest rates from July.

 

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