In 2023 general government budget deficit amounted to 2.2 % of GDP

Provisional results¹ (accordingly European System of Accounts (ESA 2010) methodology) compiled by the Central Statistical Bureau (CSB) show that in 2023 general government budget deficit accounted for EUR 893 million or 2.2 % of the gross domestic product (GDP) and, compared to 2022, it is EUR 886 million less.

General Government Budget Deficit or Surplus and Debt

	2020	2021	2022	2023
Budget deficit (-) / Surplus (+), million EUR
General government	-1 318.5	-2 396.1	-1 778.8	-893.1
Central government	-1 423.7	-2 547.9	-2 024.6	-1 070.8
Local governments	-45.8	-89.5	+20.5	-136.8
Social security fund	+151.0	+241.3	+225.3	+314.5
General government budget deficit as % of GDP	4.4	7.2	4.6	2.2
Consolidated gross debt at nominal value at the end of the year, million EUR¹
General government	12 869.4	14 809.0	16 038.7	17 581.4
Central government	13 680.3	16 016.9	17 653.6	19 401.8
Local governments	2 133.3	2 253.0	2 323.8	2 338.6
General government consolidated gross debt at nominal value at the end of the year as % of GDP	42.7	44.4	41.8	43.6

General government expenditure in 2023, compared to 2022, rose by 5.2 % and reached EUR 16.5 billion, of which EUR 0.4 billion were expenditure on support measures to compensate the increase in energy resource prices, but income increased by 12.3 % and reached EUR 15.6 billion.

As compared to operating cash flow data of the Treasury, where consolidated budget deficit in 2023 was EUR 1.4 billion, budget deficit calculated by the CSB in accordance with the methodological requirements of European System of Accounts 2010 is EUR 529.8 million or 1.3 percentage points of GDP less.

Most significant methodological adjustments with positive effect (reduces budget deficit) on the general government budget:

adjustments to claims against debtors (data of the Treasury) – by EUR 382.7 million or 0.9 % of GDP;
adjustments for balancing foreign financial aid flow (data of institutions involved in administration of foreign funds) – by EUR 298.9 million or 0.7 % of GDP;
adjustments to Recovery and Resilience Facility and Modernisation Fund (data of the Treasury) – by EUR 147.7 million or 0.4 % of GDP;
adjustments for paid interest (data of the Treasury) – by EUR 39.7 million or 0.1 % of GDP;
adjustments for retained contribution into the Single tax account (data of the Treasury) – by EUR 38.8 million or 0.1 % of GDP;
balance of the Deposit Guarantee Fund (data of Latvijas Banka) – by EUR 26.7 million or 0.1 % of GDP.

At the same time, there have also been adjustments with negative effect (increases budget deficit) on the general government budget, of which the most significant are:

balance of central and local government reclassified enterprises to general government (CSB data) – by EUR 147.2 million or 0.4 % of GDP;
adjustments to obligations against creditors (data of the Treasury) – by EUR 77.8 million or 0.2 % of GDP;
adjustments between accrued and paid interest (data of the Treasury) – by EUR 64.3 million or 0.2 % of GDP;
adjustments for inclusion of SJSC Latvijas dzelzceļš in general government sector (preliminary estimate) – EUR 43.0 million or 0.1 % of GDP:
adjustments for future payments of the 2nd pillar pension scheme funds (data of the State Social Insurance Agency) – by EUR 29.4 million or 0.1 % of GDP;
tax adjustments by using the time adjustment method (data of the Ministry of Finance) – by EUR 14.1 million or 0.03 % of GDP;
adjustments for implementation of programmes of the Development Finance Institution Altum (data of the Ministry of Finance) – EUR 9.1 million or 0.02 % of GDP;
adjustments to revenues from auctioning of emission allowances granted to Latvia (data of the Treasury) – by EUR 6.5 million or 0.02 % of GDP.

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General government consolidated gross debt accounted for EUR 17.6 billion or 43.6 % of the GDP and during a year it has increased by EUR 1.5 billion. In 2023 rise in general government debt was affected by the issuance of three new Eurobonds.

The previously published general government budget deficit and debt data for previous years have been revised taking into account the preliminary impact assessment of the inclusion of SLSC Latvijas dzelzceļš in general government sector.

Eurostat will release information on the results of the April 2024 notification in all EU Member States on 22 April.

Methodological information

While carrying out calculations of the April 2024 notification, data of the Ministry of Finance, the Treasury, State Social Insurance Agency, CSB, Riga City Council, Latvijas Banka, Central Finance and Contracting Agency and institutions involved in administration of foreign funds were used.

¹ In accordance with the requirements of Regulation (EC) No. 479/2009, the Notification on General Government Budget Deficit and Debt is submitted to the European Commission twice a year – by 1 April and 1 October. 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 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 be no more than 60.0 %.

² Consolidation was carried out in each sub-sector but not across the sub-sectors.

Media requests:
Communication Section
E-mail: media@csp.gov.lv
Phone: +371 67366621, +371 27880666

More information on data:
Vija Veidemane
Government Finance Section
E-mail: Vija.Veidemane@csp.gov.lv
Phone: +371 67366963