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

The Cabinet of Ministers is expected to decide on the budget bill this week.

Compared to this year’s targets, Latvia’s budget revenues are expected to grow by EUR 684 million next year, while expenditures are expected to rise by EUR 583 million. Under Latvia’s 2017 budget, revenues are planned at EUR 8.066 billion and expenditures at EUR 8.367 billion.

Expenditures on teachers’ salaries are planned at EUR 256,373,650 and EUR 65,637,452 will be spent on special pre-school education institutions. EUR 27,893,038 have been earmarked for nursery school teachers’ wages.

Subsidies earmarked in the 2018 budget for local governments will total EUR 350.88 million and the central government’s budget subsidy to the local governments is planned at EUR 57.58 million.

According to the budget bill, 80% of personal income tax revenues will go to municipal budgets and 20% to the central government budget. The local governments are expected to receive an estimated EUR 1.383 billion in personal income tax revenues and that their loan limit will be increased by EUR 118,138,258 next year.

Latvia’s maximum national debt is planned at EUR 10.25 billion at the end of 2018, and the finance minister will be authorized to issue guarantees worth EUR 35,956,620 on behalf of the state. The finance minister will also be authorized to cancel EUR 40,897,907 worth of liquidated companies’ debts to the government.

The value of Latvia’s GDP is expected to reach EUR 28.359 billion next year, and the budget deficit is projected at 1% of GDP.

The draft budget law also stipulates the amount state-owned enterprises are expected to pay in dividends to the government budget: Latvenergo power utility will have to pay EUR 94.22 million, Latvijas Valsts Mezi state forest manager EUR 38.22 million and Latvijas Loto national lottery operator EUR 2.8 million.

The budget bill has yet to be approved by the Cabinet of Ministers and Saeima.