Spending cuts must not affect benefits, after-school education and healthcare - Silina

RIGA - Coalition partners have agreed that spending cuts must not affect benefits, after-school education for children and young people, as well as healthcare services, Prime Minister Evika Silina (New Unity) told reporters, commenting on ministers' cost saving proposals following the weekly coalition meeting on Monday.

The prime minister said that the government coalition has agreed that the security, education and support for families, demography are the priority areas for spending in 2026.

Silina said said that people's welfare and security must not be affected - cuts in budget spending must be more about reducing administrative resources, cutting red tape and boosting national competitiveness.

The prime minister noted that "mechanical cuts" are definitely not to be supported, but "good and fair realignments" are needed to cut red tape, make life easier for businesses, and strengthen the economy.

Silina noted that institutions could be merged so that each one of them, for example, does not need to buy its own software licence.

Silina said that she would not elaborate on how the EUR 150 million could be saved in the national budget, as the coalition had agreed that work on this objective was still ongoing and that this was not the final budget process.

She noted that the coalition had agreed not to cut security spending, demographic spending and the "Program at School", as these are areas where the savings should be directed.

The prime minister said that the budget was being prepared for several years to come and the first spending cuts were identified to some extent in response to the issues concerning 2026, 2027 and 2028, but that work on the budget was still ongoing.

As reported, line ministries have submitted proposals on how cut budget expenditure by EUR 150 million, the Finance Ministry informed LETA.

The Finance Ministry has also updated its macroeconomic forecasts for 2025-2029.

According to the ministry's estimates, Latvia's economic growth is forecast at 1.1 percent this year, down 0.1 percentage point from the previous forecast, taking into account increased uncertainty in external markets following the US tariff announcements and the weaker performance of the Latvian economy at the start of the year. At the same time, the projections for the coming years remain unchanged, with the Latvian economy expected to growth by 2.1 percent in 2026 and by 2.2 percent in the following three years.