Budget, Financial Services, Latvia, Legislation

She said that the individual meetings with the ministers last week and a joint discussion on the 2017 budget with all ministers that took place yesterday had been valuable.

The finance minister said she had informed the ministers about the fiscal space in the 2017 budget in case of a 3 percent GDP growth and if the economic growth would be slower. The GDP growth forecasts will be updated in mid-summer.

"Growth was slow in the first quarter of this year but has picked up the pace by now, and tax collection has also improved. In line with the spring forecasts, the fiscal space in the next year’s budget is EUR 9 million,” Reizniece-Ozola said.

According to preliminary information from the Finance Ministry, the total amount of additional allocations sought by all ministries next year is EUR 400 million, including EUR 150 million for health care. „It is clear that we will be able to grant only a portion of the requested [additional] financing,” the finance minister said, adding that she could not give any exact figures because the discussions on the 2017 budget had just started.

The ministries are due to submit their requests for financing of new policy initiatives by June. It had been agreed that each ministry can seek extra financing for five key measures.

As a result of revision of basic expenditure discussed with each of the ministers previously, about EUR 50 million were found that the ministries could spend on urgent needs, Reizniece-Ozola said. The ways to increase budgetary revenue, for example, through fighting the shadow economy, were discussed during the ministerial meeting yesterday, she said.

As reported, on March 1, 2016, government approved the basic expenditure in the Latvian central government’s basic budget at EUR 6 billion for 2017, at EUR 6.2 billion for 2018 and at EUR 5.9 billion for 2019. Compared to the amounts approved in the Law on the Medium-term Budget Framework for 2017-2019, basic expenditure has been cut by EUR 38.3 million in 2017, increased by EUR 2.9 million in 2018 and reduced by EUR 296.3 million in 2019.