Analytics, Budget, Financial Services, GDP, Latvia

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In 2017, general government budget deficit accounted for 0.5% GDP in Latvia

Vija Veidemane , Statistics Latvia, 21.04.2018.Print version
Provisional (1) results compiled by the Central Statistical Bureau (CSB) show that, in 2017 general government budget deficit accounted for EUR 131.1 million or 0.5% of the Gross Domestic Product (GDP), whereas consolidated gross debt amounted to EUR 10.8 billion or 40.1% of the GDP. Only Social security fund concluded last year with budget surplus, while expenditure in central and local governments exceeded revenues.

Main indicators of Notification on General Government Budget Deficit / Debt

 

2014

2015

2016

2017

Budget deficit (-) / surplus (+), million EUR

General government

-351.6

-330.8

15.6

-131.1

Central government

-387.7

-446.7

-14.8

-168.6

Local governments

-51.8

79.5

56.2

-45.8

Social security fund

87.9

36.4

-25.8

83.3

 

General government consolidated gross debt at nominal value at end of year, million EUR

9 668.5

8 953.3

10 091.6

10 782.3

Gross domestic product at current prices, million EUR

23 618.2

24 320.3

24 925.6

26 856.6

 

As% of GDP

General government budget deficit (-)

-1.5

-1.4

0.1

-0.5

General government consolidated gross debt at nominal value at the end of year

40.9

36.8

40.5

40.1

 

As compared to operating cash flow data of the Treasury where consolidated budget deficit in 2017 was EUR 221.7 million, budget deficit calculated by the CSB in accordance with the methodological requirements of European System of Accounts 2010 is EUR 90.6 million or 0.3 percentage points of GDP less.




Most significant methodological adjustments with positive effect on the general government budget:


As compared to 2016, the general government consolidated gross debt in 2017 grew by EUR 0.7 billion or 6.8% and reached EUR 10.8 billion.


-       adjustments in claims against debtors (data of the Treasury) – by EUR 164.9 million or 0.6% of GDP;

-       adjustments for balancing foreign financial aid flow (data of institutions involved in administration of foreign funds) – by EUR 136.9 million or 0.5% of GDP;

-       adjustments of expenditure on construction of the Southern Bridge (data of Riga City Council) – EUR 25.1 million or 0.1% of GDP;

-       adjustments for exclusion of transactions of derived financial instruments (data of the Treasury) – by EUR 18.1 million or 0.1% of GDP;

-       tax adjustments by using the time adjustment method (data of the Ministry of Finance) – by EUR 17.9 million or 0.1% of GDP.




At the same time, there have also been adjustments with negative effect on the general government budget:




-       compensation to Latvenergo for reduction of liabilities with respect to installed cogeneration power capacity (data of the Ministry of Finance) – by EUR 140.0 million or 0.5% of GDP;

-       adjustments to obligations against creditors (data of the Treasury) – by EUR 90.8 million or 0.3% of GDP;

-       adjustments for future payments of the 2nd pillar pension scheme funds (data of the State Social Insurance Agency) – by EUR 21.9 million or 0.1% of GDP;

-       adjustments for government investments in state and local government enterprises (data of the Treasury) – by EUR 13.5 million or 0.1% of GDP;

-       adjustments to revenues from auctioning of emission allowances granted to Latvia (data of the Treasury) – by EUR 4.1 million or 0.02% of GDP.Calculations of the April 2018.


Notification are based on the data of the Ministry of Finance, the Treasury, State Social Insurance Agency, CSB, Riga City Council, Central Finance and Contracting Agency and institutions involved in the administration of foreign funds.


Information on the results of the April 2018 notifications of all EU Member States will be published by Eurostat on April 23.


More information regarding the Notification on General Government Budget Deficit and Debt is available in the CSB website section Government Finances Government Finances


1In accordance with the requirements of Regulation (EC) No. 479/2009, the Notification on General Government Budget Deficit and Debt is submitted to the European Commission twice a year – by 1 April and 1 October. The results of the Notification are used for assessing how the EU Member States observe the compliance of the respective economic indicators with the criteria established by the Maastricht Treaty, that is, the ratio of the planned and actual general government budget deficit to the GDP at current prices must not exceed 3% and the ratio of the government debt to the gross domestic product at current prices must be no more than 60%.






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