The government on Monday, October 14, approved the draft 2025 state budget and the budget framework for 2025, 2026 and 2027. The 2025 budget is planned to raise revenues of EUR 15.1 billion and to spend EUR 17.1 billion. Compared to this year, revenue is expected to increase by €583 million and expenditure by €876 million.
A third of spending will be on social protection, over 10% on defense, including equipping the country's external borders and cyber-security measures, and over 7% on education.
Next year's general government deficit is planned at 1.3 billion, or 2.9% of gross domestic product (GDP), which would be in line with requirements, but risks being exceeded if the economy does not develop as fast as expected.
The Speaker of the Saeima, Daiga Mieriņa, said on Latvian Television's "Morning Panorama" program Thursday that the 2025 state budget neglected the health and education sectors. Mieriņa also admitted that the quality of the discussion on tax reform had not been high enough.
"The budget has been drafted on time, but the process has been long. The tax working group has worked for a long time, and the proposals have been made in difficult discussions, but at the same time very late. So perhaps what has been missing from this budget process is a sufficiently high-quality discussion on tax reform as such," said Mieriņa.
Oļegs Burovs (Honor to Serve Riga), chairman of the Saeima's State Administration and Local Government Committee, said on Latvian Television's "Morning Panorama" program that the budget deficit for next year has been stopped at the "red line", but that it should be taken into account that it will be breached in the future.
"It is good that we stopped at the red line and we have 2.999% [budget deficit]. Given that several EU Member States have even higher budget deficits [...], we should be prepared for the budget deficit in Latvia to exceed 3% as well. This is an objective reality," Burovs assessed.
