Saeima approves 2024 budget in first reading

After several hours of debate, the Saeima supported the 2024 draft budget in first reading on November 16.

53 MPs voted to support the draft budget, 42 voted against.

The parliament will view the bill in the second, final, reading on December 7.

The debate was long and opinionated, with the coalition members referring to it as a "budget of security and sustainability" while the opposition member Edgars Tavars (United List) called it a "tadpole with New Unity's head" pointing to more money being allocated to New Unity-headed ministries.

Some opposition members also stated that the budget does not foresee enough to improve demographic issues, low birth rates, and emigration issues. 

Opposition deputy Andris Kulbergs (United List) pointed out that the budget lacks a plan for battling shadow economy and that there is not enough thought put into growing the economy and exports.

Meanwhile, Latvian President Edgars Rinkēvičs assessed that there is a good balance between expenses and deficit limitations in the next year's budget. He also stated that there are "spheres where more money should be put in, and there are really many such needs."

The draft budget is drawn up assuming that Latvia's gross domestic product (GDP) will increase by 2.5% next year, while inflation will be 2.9%. Public debt is projected to grow in 2024, from 39.9% of GDP this year to 41% of GDP next year.

The Ministry of Finance noted that both the deficit and debt values are below the reference values of 3% of GDP for the deficit and 60% of GDP for debt set out in the fiscal rules of the European Union.

The revenue of the 2024 consolidated budget is planned to be EUR 14.5 billion, while expenditure – EUR 16.2 billion.

Compared to the 2023 budget, the planned revenue of the State budget in 2024 is expected to be EUR 1.763 billion higher. State budget expenditure in 2024 is planned to be 1.538 billion euros higher than in the State budget of 2023.

The draft law stipulates that the planned revenues in the basic budget amount to 10 billion euros, while expenditures amount to 12.15 billion euros. The increase in state basic budget expenditure compared to the 2023 plan is 1.29 billion euros, or 11.8%, the bill's annotation said.

The total additional support for priorities for 2024 is estimated at EUR 783.7 million, of which EUR 486.4 million is earmarked for the government's national priorities – internal and external security (EUR 91.9 million), education (EUR 119,5 million) and health (EUR 275 million).

An increase of EUR 502 million is foreseen for the implementation of European Union policy instruments and projects and measures co-financed by other foreign financial assistance.

The special budget projects revenues of EUR 4.8 billion, while expenditure of EUR 4.4 billion. The increase in expenditures of the State special budget against the 2023 plan is 272.4 million euro or 6.7%.


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