General Government Budget Deficit in 2012 has dropped to 1.2% of GDP
General government budget deficit at the end of 2012 comprised LVL 187.2 million or 1.2 % of the Gross Domestic Product (GDP), and the general government debt comprised LVL 6309.2 million or 40.7 % of GDP, according to the results of the April 2013 general government budget deficit and debt notification compiled by Central Statistical Bureau (CSB), which has been made in line with the methodology of European System of Accounts ESA’95.
April 2013 general government budget deficit and debt notification: main indicators
Budget deficit (-) /surplus (+), mln LVL
Social security fund
General government consolidated gross debt at nominal value at end of year, mln LVL
Gross domestic product at current prices, mln
As % over GDP
General government net borrowing (-)
General government consolidated gross debt at nominal value at end of year
Compared to provisional data of the Treasury, which show that in 2012 general government consolidated budget surplus was LVL 19.1 mln or 0.1% of GDP, budget expenditure, which is calculated accordingly methodology requirements of European System of Accounts ESA’95, exceeds revenue and comprises deficit. Difference between data of the CSB and the Treasury is LVL 206.4 mln or 1.3% of GDP, and it is comprised by several adjustments.
Most significant adjustments with negative effect on the general government budget (increase of deficit):
- government investment in financial institutions and enterprises (data of the Treasury) – adjustment by LVL 94.8 mln or 0.6% of GDP;
- balance of enterprises controlled and financed by central and local governments reclassified to general government (data of the CSB) – adjustment by LVL 56.2 mln or 0.4% of GDP;
- adjustment on financial data of the EU funds (data of the information system of the management of the EU funds of the Ministry of Finance) – by LVL 42.4 mln or 0.3% of GDP;
- adjustment on in previous years unused funds received in budget (data of the information system of the management of the EU funds of the Ministry of Finance) – by LVL 28.4 mln or 0.2% of GDP;
- adjustment for liabilities to creditors (data of the Treasury) – by LVL 22.1 mln or 0.1% of GDP.
At the same time adjustment with positive effect to the general government budget was done (deficit reduction):
- taxes adjustment using time adjustment method (information source – calculation of the Ministry of Finance) – by LVL 25.9 mln or 0.2% of GDP;
- adjustment on income from privatisation (data of the Ministry of Economy and the Treasury) – by LVL 13.0 mln or 0.1% of GDP.
In the calculations of notification of April 2013 data from the Ministry of Finance, the Treasury, the Ministry of Economics, CSB and Riga City Council are used.
On April 22 the European Union Statistical Office Eurostat will release information on the results of the April 2013 notification in all EU member states.
Government Finances Section
1 In compliance with the requirements of Regulation EC No. 479/2009, the general government deficit and debt notification is submitted to the European Commission twice a year, by April 1 and October 1. 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 gross domestic product (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 not be higher than 60.0%.
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