EUR 565.5 million additional funding planned for next year's budget priorities

RIGA - Additional funding of EUR 565.5 million is planned for the priorities set by the government in next year's state budget - security, support for families with children and education, according to the information report "On priority measures to be included in the draft state budget law for 2026, 2027 and 2028" submitted by the Finance Ministry to the government.

The Finance Ministry informed that of this EUR 320.3 million are earmarked for security, EUR 45 million for education, EUR 94.8 million for supporting families with children and another EUR 105.4 million for other measures. Most of the additional funding for the priorities identified by the government will be provided through cuts in state budget spending.

When preparing the 2025 state budget, it was already decided to make a medium-term reduction of EUR 50 million annually in the base expenditure, the ministry noted. However, when working on the 2026 budget, a review of state budget expenditure led to the joint identification and agreement by line ministries on an expenditure reduction of EUR 171 million, which was approved by the government on August 26 this year. Further work on next year's budget has secured an additional EUR 12.4 million in spending cuts.

This brings the total additional funding secured as a result of the cuts to the national budget to EUR 233 million for 2026. In the medium term, the reduction in state budget expenditure for 2026-2028 amounts to a total of EUR 814.1 million, the ministry said.

In 2026, the bulk of the additional funding for priorities - EUR 320 million - will be allocated to measures related to strengthening national defense capabilities and internal security. Meanwhile, additional EUR 444 million are planned for the purpose in 2027 and EUR 655 million in 2028.

Overall, defense spending will represent 4.6 percent of gross domestic product (GDP) next year, 4.9 percent in 2027 and 4.7 percent in 2028, according to NATO methodology. This investment will strengthen the country's defense capabilities, increase citizens' security against external threats and improve border infrastructure.

In turn, EUR 3 million will be allocated to the Interior Ministry to strengthen security in border municipalities.

In addition to the government's priorities of support for families with children and education, additional funding of EUR 513 million is foreseen over the medium term, including EUR 139 million in 2026, EUR 179 million in 2027 and EUR 194 million in 2028.

Improving the quality of education and introducing the Program at School funding model from September 1, 2026, will receive EUR 45 million.

Measures to support families with children will receive additional funding of EUR 94 million in 2026.

An additional EUR 17 million will be earmarked for other priority actions, including EUR 10 million for palliative care through policy changes and EUR 3.2 million for social rehabilitation services.

From July 1 next year, the value added tax (VAT) rate on essential food products - bread, milk, eggs and fresh poultry meat - will be reduced for one year as a pilot project.

State budget support for farmers will also be maintained in 2026, with an additional EUR 59.3 million in funding for the sector.