RIGA - Saeima today in principle supported the bill on the government budget for 2023 and budget framework for 2023, 2024 and 2025, according to which the consolidated budget revenue is planned at EUR 12.721 billion and expenditure at EUR 14.673 billion.
Proposals to the budget bill should be submitted until February 20.
Saeima in principle also supported to related amendments to the Postal Law, Law on Pollution, Law on Education, Law on State Pensions, Law on Social Services and Social Assistance, Law on the Protection of Children's Rights, Law on State Social Benefits, Law on Annual Statements and Consolidated Annual Statements, State Cultural Capital Fund Law, Civil Protection and Disaster Management Law, Law on Compulsory Social Insurance in Respect of Accidents at Work and Occupational Diseases, Law on Social Security, and Road Traffic Law.
It is planned to hold the final reading of the budget on March 8 and it would come into force on April 1, said the budget committee chairman Janis Reirs (New Unity) earlier.
Compared to the 2022 budget, in 2023 revenue is expected to grow by EUR 2.025 billion and expenditure - by EUR 2.233 billion.
The Finance Ministry explains increase of revenue and expenditure with the geopolitical situation in the region and the government's resolution to support Latvian residents in the situation of growing energy prices, as well as the planned to support to Ukraine in its fight against Russian aggression.
Finance Minister Arvils Aseradens (New Unity) said at the government meeting earlier that next year's budget has the biggest expenditure in Latvia's history.
The consolidated government budget deficit is projected at EUR 1.95 billion or 4.6 percent of the gross domestic product (GDP).
Revenue to the basic budget is planned at EUR 8.796 billion and expenditure - at EUR 10.861 billion, growing by EUR 1.564 billion or 16.8 percent from 2022.
Revenue to the government special social insurance budget are planned at EUR 4.197 billion and expenditure at EUR 4.083 billion, up EUR 697.9 million or 20.6 percent against 2022.
The government has resolved to implement the fiscal policy principles stated by the Fiscal Discipline Law and priority development directions stated in the medium-term budget policy - security, education, energy, competitiveness, the quality of life, public health.
Priority direction Security in the medium term will receive funding worth more than EUR 1.1 billion, meanwhile, more than EUR 170 million will be allocated for Education direction.
Quite a small funding or EUR 5 million will be allocated for Energy direction - this direction is mostly funded from the EU funds and the Recovery of Resilience Facility, and a considerable part if this development is also covered by dividends from Latvenergo.
Competitiveness direction is related with improvements in many areas - financial sector policy, fiscal policy, municipal financial system, tax policy, public administration and investments, business and investment environment, housing, human capital and employment, transport, agriculture, forestry and fishery, regional development policy, communication technologies development, data security and data economic development. EUR 367 million have been allocated for this direction.
Additional funding worth EUR 600 million is allocated for the direction of the quality of life, human and public health. The bulk of it will be invested in the health care sector, followed by public administration capacity and increase of minimum income.
According to the latest macroeconomic indicators, the general government budget deficit is projected at 4.2 percent of GDP in 2023, 2.3 percent in 2024 and 2 percent in 2025.
GDP is expected to drop 0.6 percent in 2023, while in 2024 and 2025 it is expected to rise 3 percent. Inflation forecast for 2023 is 8.5 percent, and in the following years it will stabilize to 2 percent in 2025.