The timing of parliamentary elections in October, which were followed by protracted government formation talks and ministerial shuffling, meant that Latvia entered 2023 with a temporary or placeholder budget. The government should finally see its spending plans realised when the second quarter of the year arrives on April 1.
The 2023 budget foresees income of EUR 12.7 billion and expenses of EUR 14.7 billion. Compared to the 2022 budget, the planned State budget income in 2023 is EUR 2.025 billion higher. However, the State budget expenses this year are EUR 2.233 billion higher than in the 2022 State budget law.
The planned income in the basic budget is 8.8 billion, but the expenses are 10.9 billion euros. In the special budget, income is projected to be EUR 4.2 billion, but expenses EUR 4.1 billion. The general government budget deficit for 2023 is planned at EUR 1.77 billion or 4.2% of GDP.
The budget bill sets the debt ceiling at EUR 19.2 billion, or 45% of GDP, with the flexibility to take additional financing measures to raise resources in time to repay the planned debt in the event of favourable financial market conditions or in the event of risks with a negative impact on the economy and the State deficit. State debt is projected at EUR 18 billion, or 42% of GDP.
While the government's majority all but ensures the budget will be passed as planned, the debate usually offers some interesting indications of how effective or otherwise opposition parties are in their attempts to pick holes in the plans and the degree to which coalition parties are interested in defending their spending.
You can follow Wednesday's parliamentary debate live at the Saeima website (in Latvian). https://live.tiesraides.lv/saeima.lv/live2/1
Moves are already being made to ensure next year's budget is passed in a more timely manner with the governent announcing that its package of 2024 budget bills is expected to be submitted to the Saeima on October 12 this year so the budget can be passed before the year is out.