In 2020, general government budget deficit amounted to EUR 1.3 billion
Provisional results1 (accordingly European System of Accounts (ESA 2010) methodology) compiled by the Central Statistical Bureau (CSB) show that in 2020 general government* budget deficit accounted for EUR 1.3 billion or 4.5 % of the Gross Domestic Product (GDP) and general government consolidated gross debt amounted to EUR 12.7 billion or 43.5 % of the GDP.
General Government Budget Deficit or Surplus and Debt
| 2017 | 2018 | 2019 | 2020 |
Budget deficit (-) / Surplus (+), million EUR | ||||
General government | -210.8 | -234.0 | -171.7 | -1,326.6 |
Central government | -227.2 | -288.7 | -648.7 | -1,420.8 |
Local governments | -74.1 | -191.5 | 186.8 | -38.4 |
Social security fund | 90.5 | 246.2 | 290.2 | 132.6 |
General government budget deficit as % of GDP | -0.8 | -0.8 | -0.6 | -4.5 |
Consolidated gross debt at nominal value at the end of the year, million EUR2 |
|
|
|
|
General government | 10 518.7 | 10 815.6 | 11 246.6 | 12 749.9 |
Central government | 10 530.7 | 11 039.9 | 11 885.2 | 13 593.6 |
Local governments | 1 738.4 | 1 926.9 | 2 023.4 | 2 100.5 |
General government consolidated gross debt at nominal value at the end of the year as % of GDP | 39.0 | 37.1 | 37.0 | 43.5 |
Under the impact of Covid-19 pandemic in 2020 general government revenues, compared to 2019, reduced by 0.4 % and comprised EUR 11.5 billion, but expenditure – increased by 9.5 % and reached EUR 12.7 billion, of which EUR 0.8 billion were expenditure on Covid-19 support measures for the national economy.
As compared to operating cash flow data of the Treasury, where consolidated budget deficit in 2020 was EUR 1 148.9 million, budget deficit calculated by the CSB in accordance with the methodological requirements of European System of Accounts 2010 is EUR 177.7 million or 0.6 percentage points of GDP more.
Most significant methodological adjustments with positive effect (reduces budget deficit) on the general government budget:
- adjustments to state aid programmes issued to the Development Finance Institution Altum (data of the Treasury) – EUR 138.4 million or 0.5 % of GDP;
- adjustments to claims against debtors (data of the Treasury) – by EUR 79.6 million or 0.3 % of GDP;
- tax adjustments by using the time adjustment method (data of the Ministry of Finance) – by EUR 41.5 million or 0.1 % of GDP;
- adjustments for exclusion of transactions of derived financial instruments (data of the Treasury) – by EUR 25.5 million or 0.1 % of GDP;
- balance of the Deposit Guarantee Fund (data of the Financial and Capital Market Commission) – by EUR 18.4 million or 0.1 % of GDP;
- adjustments between accrued and paid interest (data of the Treasury) – by EUR 14.8 million or 0.1 % of GDP;
- adjustments to revenues from auctioning of emission allowances granted to Latvia (data of the Treasury) – by EUR 9.6 million or 0.03 % of GDP.
At the same time, there have also been adjustments with negative effect (increases budget deficit) on the general government budget:
- adjustments for government investments in central and local government enterprises (data of the Treasury) – by EUR 300.4 million or 1.0 % of GDP;
- adjustments for balancing foreign financial aid flow (data of institutions involved in administration of foreign funds) – by EUR 85.7 million or 0.3 % of GDP;
- adjustment for superdividend – EUR 48.8 million or 0.2 % of GDP;
- adjustments to obligations against creditors (data of the Treasury) – by EUR 35.2 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 28.9 million or 0.1 % of GDP;
- balance of central and local governments reclassified to general government (CSB data) – by EUR 6.1 million or 0.02 % of GDP.
General Government Budget Deficit or Surplus by sub-sectors 2017 – 2020, as % of GDP
Taking into account the increasing volume of borrowings affected by financing needed to reduce the consequences of Covid-19, in 2020, compared to 2019, general government debt has risen by EUR 1.5 billion and reached EUR 12.7 billion or 43.5 % of GDP.
While carrying out calculations of the April 2021 notification, data of the Ministry of Finance, the Treasury, State Social Insurance Agency, CSB, Riga City Council, Financial and Capital Market Commission, Central Finance and Contracting Agency and institutions involved in administration of foreign funds were used.
Eurostat will release information on the results of the April 2021 notification in all EU Member States on 22 April.
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@csb.gov.lv
Phone: +371 27880666
More information on data:
Vija Veidemane
Government Finance Section
E-mail: Vija.Veidemane@csb.gov.lv
Phone: +371 67366963
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