Analytics, Economics, Financial Services, GDP, Latvia

October 2013 general government budget deficit and debt notification: main indicators

In the calculation of notification data compiled by the Ministry of Finance, according to the national legislation on the budget and finance management, are used, which show that in 2012 general government sector budget surplus was LVL 27.0 (EUR 38.4) million or 0.2% of GDP.

But, adjustments made accordingly methodology requirements of European System of Accounts ESA’95, which require following accumulation, not money flow, principle in the calculations of government statistics area, to exclude financial transactions from government sector balance, show budget deficit instead of budget surplus.

Main negative adjustments are related to government investment in financial institutions and enterprises, inclusion of balance of enterprises controlled and financed by central and local governments reclassified to general government in data, as well as neutralization of impact of the EU funds.

[1]In compliance with the requirements of Regulation EC No. 479/2009, the general government deficit and debt notification is submitted to the European Commission twice a year, by April 1 and October 1. 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 general government budget deficit to the gross domestic product (GDP) at current prices must not exceed 3.0% and the ratio of the government debt to the gross domestic product at current prices must not be higher than 60.0%.

More detailed information is available in the CSB database.