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In 2018, general government budget deficit in Latvia amounted to 295.4 mln euros

Vija Veidemane, Government Finances Section, 23.04.2019.Print version
Provisional1 results (accordingly European System of Accounts (ESA 2010) methodology) compiled by the Central Statistical Bureau (CSB) show that, in 2018 general government budget deficit accounted for EUR 295.4 mln or 1% of the Gross Domestic Product (GDP) and general government consolidated gross debt amounted to EUR 10.6 bn or 35.9% of the GDP.

General government sector includes all central and local government budgetary institutions, the social security fund and the central and local government-financed and controlled enterprises selected in compliance with ESA 2010 criteria on government sector formation.


General Government Budget Deficit or Surplus and Debt


 

2015

2016

2017

2018

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

General government

-331.4

16.2

-155.7

-295.4

Central government

-447.4

-15.4

-196.8

-319.6

Local governments

79.4

56.2

-49.4

-214.2

Social security fund

36.4

-24.6

90.5

238.4

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

8 953.3

10 091.6

10 806.8

10 608.0

As % of GDP

General government budget deficit (-)

-1.4

0.1

-0.6

-1.0

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

36.8

40.3

40.0

35.9


As compared to operating cash flow data of the Treasury where consolidated budget deficit in 2018 was EUR 215.1 mln, budget deficit calculated by the CSB in accordance with the methodological requirements of European System of Accounts 2010 is EUR 80.3 mln or 0.3 percentage points of GDP less.


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

  • adjustments in claims against debtors (data of the Treasury) – by EUR 156.6 mln or 0.5% of GDP;
  • adjustments of expenditure on construction of the Southern Bridge (data of Riga City Council) – by EUR 26.8 mln or 0.1% of GDP;
  • adjustments for exclusion of transactions of derived financial instruments (data of the Treasury) – by EUR 21.2 mln or 0.1% of GDP;
  • adjustments for balancing foreign financial aid flow (data of institutions involved in administration of foreign funds) – by EUR 19.5 mln or 0.1% of GDP;
  • balance of the Deposit Guarantee Fund (data of the Financial and Capital Market Commission) – by EUR 18.5 mln or 0.1% of GDP;
  • tax adjustments by using the time adjustment method (data of the Ministry of Finance) – by EUR 8 mln or 0.03% of GDP.

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

  • adjustments to obligations against creditors (data of the Treasury) – by EUR 130.2 mln or 0.4% of GDP;
  • adjustments to revenues from auctioning of emission allowances granted to Latvia (data of the Treasury) – by EUR 81 mln or 0.3% of GDP;
  • balance of corporate enterprises of central and local governments reclassified to general government (CSB data) – by EUR 50.7 mln or 0.2% of GDP;
  • adjustment of securities premium in the issue year to ensure recognition of premiums in revenue in the following years until the redemption of securities (data of the Treasury) – by EUR 44.2 mln or 0.1% of GDP;
  • adjustments for future payments of the 2nd pillar pension scheme funds (data of the State Social Insurance Agency) – by EUR 22.9 mln or 0.1% of GDP;
  • adjustments for government investments in state and local government enterprises (data of the Treasury) – by EUR 5.5 mln or 0.02% of GDP.



As compared to 2017, the general government consolidated gross debt in 2018 reduced by EUR 0.2 bn or 1.8% and comprised EUR 10.6 bn.

Calculations of the April 2019 Notification are based on the data of the Ministry of Finance, the Treasury, State Social Insurance Agency, CSB, Riga City Council, Financial and Capital Market Commission, Central Finance and Contracting Agency and institutions involved in the administration of foreign funds.








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