Analytics, Budget, Financial Services, Latvia

The results of the notification are used for assessing how the EU Member States observe the compliance of the respective economic indicators with the criteria established by the Maastricht Treaty, that is, the ratio of the planned and actual government budget deficit to the Gross Domestic Product at current prices must not exceed 3% and the ratio of the government debt to the Gross Domestic Product at current prices must not be higher than 60.0% which are calculated in conformity with ESA’95 requirements.

Government budget deficit and debt notification indicators submitted to the European Commission have never exceeded criteria set in the Maastricht Treaty.

October 2008 government budget deficit and debt notification: main indicators[1]

Although, in 2007 general government budget surplus has been found, opposite tendency has been observed in breakdown by subsectors. Thus, during 2007 budget deficit in central government subsector increased by 102.0 mln lats and in subsector of local governments – by 47.6 mln lats. During a year surplus of social security fund subsector has increased by 182.4 lats, thus covering budget deficit of central government and local governments’ subsectors and even generating small surplus.

General government sector deficit or surplus By subsectors in 2004-2007, % of GDP

Even thought general government sector debt value in Latvia increases with every year, its relation over GDP decreases with every year. As in 2007, compared to 2006, debt value increased to 140.8 mln lats, its relation over GDP, has decreased by 1.2 percentage points, respectively.

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

In the calculations of notification of October 2008 data from the Ministry of Finance, the Treasury, the Ministry of Economics and Central Statistical Bureau are used.

On October 22 the EU Statistical Office Eurostat will release information on the results of the October 2008 notification in all EU member states.

* In compliance with the requirements of Regulation EC No. 3605/93, the government deficit and debt notification is submitted to the European Commission twice a year, by April 1 and October 1.

[1] Previously published data on general government budget deficit and debt in April 2008 notification for 2005 and 2—7 are adjusted.