RIGA - The Cabinet of Ministers on Tuesday approved Latvia's draft budget for 2021, projecting a budget deficit of EUR 1.2 billion, or 3.9 percent of GDP.
According to the draft law on Latvia's 2021 budget, consolidated budget revenue is planned at EUR 9.579 billion, down EUR 328 million from this year.
Next year's budget expenditure, meanwhile, is projected at EUR 10.758 billion, which is an increase of EUR 744 million against this year's budget expenditure.
According to the draft law on the medium-term budget framework, Latvia's budget expenditure is planned at EUR 9.27 billion in 2022 and EUR 9.17 billion in 2023.
Latvia's GDP forecast (at current prices) for 2021 is EUR 30.02 billion. In 2021, the general government budget deficit can widen to 3.9 percent of GDP.
Maximum government debt can grow to EUR 14.44 billion and local governments are allowed to increase their loans by a total of EUR 268.12 million by the end of 2021.
Under the budget bill, 75 percent of personal income tax revenue will go to local governments' budgets and 25 percent to the central government budget. The local governments' share is estimated at EUR 1.34 billion.
Earmarked subsidies to local governments, mostly for teachers' salaries, are planned at EUR 405.08 million. Government budget subsidies to local governments are planned at EUR 199.34 million, including EUR 198.68 million to the financial equalization fund.
According to the draft law on the medium-term budget framework, Latvia's fiscal reserve is planned at 0.1 percent of GDP for 2021, 2022 and 2023.
Finance Minister Janis Reirs (New Unity) is due to deliver the draft 2021 budget to Saeima this Wednesday, October 14.