Government approves 2019 budget with 0.5% deficit

The Cabinet of Ministers on Tuesday approved draft law on Latvia’s budget for 2019 and decided to send it to Saeima for adoption.

In 2019, revenue in the government consolidated budget are planned at €9.2 billion and expenditure at €9.4 billion. In the government basic budget, revenue is planned at €6.4 billion and expenditure at €6.8 billion. In the government special budget, revenue is planned at €3 billion and expenditure at €2.8 billion.

In 2019, the general government consolidated budget is expected to run a deficit of 0.5% of GDP. Latvia’s GDP, meanwhile, is projected to grow 3% this year.

Representatives of the Finance Ministry indicated that as a result of a revision of this year’s budget expenditure, €51.3 million would be saved in the 2019 budget, of which €7.6 million would be used to improve the fiscal space and €43.7 have been earmarked for ministries’ priorities.

In this year’s budget, €87.5 million have been allocated for raising medics’ wages, €8.9 and million for raising salaries to judges and court employees.

€7.2 million have been earmarked for measures aimed at combating money laundering and the financing of terrorism.

€3 million will be spent enhancing the work of independent institutions like public media, the Ombudsman’s Office, the State Audit Office and others, and €2.6 million will be provided to activities intended to support the Latvian diaspora in foreign countries.

Latvia’s defense funding will grow by €60.3 million from last year, also in order to maintain defense spending at 2% of GDP.

This year, local governments will receive 19.6% of Latvia’s total tax revenue under an agreement reached on Monday between government ministers and representatives of the Latvian Association of Local and Regional Governments. Together with a special subsidy, the local governments’ tax revenue will total €1.47 billion, or 19.6% of Latvia’s projected tax revenue, excluding social security contributions payable to the central government basic budget for healthcare financing.

In accordance with the budget drafting timetable, the government is due to file the draft budget with the parliament this Friday, March 8.

Latvia 2019 budget
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