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In 2021 general government budget deficit amounted to 7.3 % of GDP

Provisional results1 (accordingly European System of Accounts (ESA 2010) methodology) compiled by the Central Statistical Bureau (CSB) show that in 2021 general government budget deficit accounted for EUR 2.4 billion or 7.3 % of the Gross Domestic Product (GDP) and general government consolidated gross debt amounted to EUR 14.7 billion or 44.8 % of the GDP.

General Government Budget Deficit or Surplus and Debt

 

2018

2019

2020

2021

Budget deficit (-) / Surplus (+), million EUR

General government

-245.3

-174.0

-1 317.3

-2 415.6

Central government

-300.0

-651.0

-1 395.3

-2 475.3

Local governments

-191.5

186.8

-25.2

-140.9

Social security fund

246.2

290.2

103.2

200.6

General government budget deficit as % of GDP

-0.8

-0.6

-4.5

-7.3

Consolidated gross debt at nominal value at the end of the year, million EUR2

 

 

 

 

General government

10 815.6

11 246.6

12 754.3

14 739.7

Central government

11 039.9

11 885.2

13 598.1

15 974.5

Local governments

1 926.9

2 023.4

2 100.4

2 226.0

General government consolidated gross debt

at nominal value at the end of the year as % of GDP

37.1

36.7

43.3

44.8

Under the impact of Covid-19 pandemic in 2021 general government expenditure, compared to 2020, rose by 16.0 % and reached EUR 14.8 billion, of which EUR 2.1 billion were expenditure on Covid-19 support measures for the national economy. Revenues increased by 8.2 % and reached EUR 12.4 billion.

As compared to operating cash flow data of the Treasury, where consolidated budget deficit in 2021 was EUR 1 825.3 million, budget deficit calculated by the CSB in accordance with the methodological requirements of European System of Accounts 2010 is EUR 590.4 million or 1.8 percentage points of GDP more.

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 122.9 million or 0.4 % of GDP;
  • tax adjustments by using the time adjustment method (data of the Ministry of Finance) – by EUR 120.3 million or 0.4 % of GDP;
  • adjustments between accrued and paid interest (data of the Treasury) – by EUR 40.6 million or 0.1 % of GDP;
  • adjustments for exclusion of transactions of derived financial instruments (data of the Treasury) – by EUR 32.2 million or 0.1 % of GDP;
  • balance of the Deposit Guarantee Fund (data of the Financial and Capital Market Commission) – by EUR – 19.3 million or 0.1 % of GDP;
  • adjustments to state aid programmes issued to the Development Finance Institution Altum (data of the Treasury) – EUR 10.4 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 undivided contribution into the single tax account (data of the Treasury) – by EUR 237.6 million or 0.7 % of GDP;
  • adjustments of the Recovery and Resilience Facility (data of the Treasury) – by EUR 237.4 million or 0.7 % of GDP;
  • adjustments to obligations against creditors (data of the Treasury) – by EUR 235.6 million or 0.7 % of GDP;
  • adjustments for government investments in central and local government enterprises (data of the Treasury) – by EUR 87.9 million or 0.3 % of GDP;
  • adjustments for balancing foreign financial aid flow (data of institutions involved in administration of foreign funds) – by EUR 73.5 million or 0.2 % of GDP;
  • adjustment of securities premium in the issue year to ensure recognition of premiums in revenue in the following years until the redemption of securities (data of the Treasury) – by EUR 32.1 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 28.6 million or 0.1 % of GDP.

General Government Budget Deficit or Surplus by sub-sectors in 2018–2021,

as % of GDP

Graph - General Government Budget Deficit or Surplus by sub-sectors in 2018–2021, as % of GDP

Taking into account the increasing volume of borrowings affected by financing needed to reduce the consequences of Covid-19, in 2021, compared to 2020, general government debt has risen by EUR 2.0 billion and reached EUR 14.7 billion or 44.8 % of GDP.

Eurostat will release information on the results of the April 2022 notification in all EU Member States on 22 April.

Methodological information

While carrying out calculations of the April 2022 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.

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

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