Budget, Financial Services, GDP, Latvia, Legislation, Markets and Companies

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The debates about the budget and the associated bills continued for almost nine hours. 60 ruling coalition MPs voted for the budget, 13 opposition members and representatives of For Latvia From The Heart and the Alliance of Regions of Latvia voted against, whereas Harmony's 21 MPs abstained.

During the debates, opposition members criticized the budget saying that it would fail to ensure economic growth next year. However, the debates mostly concerned individual spending items, not the budget in general.

Master budget revenue in 2015 is projected at EUR 5.1 billion and spending at EUR 5.5 billion. Budget spending next year will increase about 4% from 2014.

The general government budget deficit, calculated according to the European system of national and regional accounts, is predicted at 1% of gross domestic product in 2015.

The budget priorities include strengthening national defense, social and national security, as well as measures to reduce inequality and foster the competitiveness of Latvian economy.

Minimum monthly wage will be increased from EUR 320 to EUR 360 next year, whereas personal income tax will be cut one% from 24% to 23%.

The budget also stipulates lifting all restrictions on sickness and unemployment, maternity and paternity benefits.

EUR 3 million will be provided for implementation of the new teacher remuneration model.

The microenterprise tax next year will be 11%, to be further increased to 13% in 2016 and 15% in 2017.

Several measures are planned to combat the shadow economy – improving information exchange among financial institution, strengthening the tax administration's capacity, making companies' board members personally responsible for their company's tax debts, and others.

Additional funds will also be allotted for several defense initiatives, including for the rapid reaction units, development of the Home Guard, special tasks units, and others.

According to the Finance Ministry's estimates, the general government budget deficit will be 1% of GDP in 2015, 0.9% in 2016 and 0.7% in 2017. Economic growth next year is projected at 2.8%, and in 2016 and 2017 at 3.3% and 3.6% respectively.