Budget, Financial Services, Latvia

"The budget deficit could be about a billion euros or 9-10% of tax revenues," the finance minister said, adding that the current budget deficit is about EUR 500 mln.

Reirs also noted that in early March, budget revenue was forecast to fall by between EUR 600 mln to EUR 1.5 bn this year. "Preliminary data for August show that we will probably not reach the most pessimistic forecasts," the finance minister said, noting that May was the most difficult month in terms of revenue, with the largest deficit.

At the same time, Reirs pointed out that considering that this crisis is related to the lack of external demand, and not to structural problems in the Latvian economy or problems in public administration, no changes will be made in the share of budget expenditures. "In the classic situation, we would have to consolidate, but we will not do this and allow for a budget deficit," the minister said.

The minister also added that a medium-term budget has been submitted to the European Commission, which does not envisage changes in the amount and structure of expenditures, while planning to achieve a balanced budget within three years of growth.