Notification on General Government Budget Deficit and Debt in April 2008

16.04.2008

According to results of the April 2008 general government budget deficit and debt notification, which were prepared in conformity with methodology of European System of Accounts, the general government deficit in 2007 reached 5.7 mln lats and the general government debt was 1356.4 mln lats.

In compliance with the requirements of Regulation EC No. 3605/93, the 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 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%.

October 2007 government budget deficit and debt notification: main indicators[1]


2004

2005

2006

2007

Budget deficit (-)/surplus (+), mln LVL

General government

-76.5

-32.3

-24.1

-5.7

Central government

-145.0

-140.9

-218.2

-314,9

Local government

-8.3

-9.7

-38.0

-105,3

Social security fund

76.8

118.3

232.1

414,5

General government consolidated gross debt at nominal value at end of year, mln LVL

1110.4

1122.1

1190.5

1356.4

Gross domestic product at current prices, mln LVL

7434.5

9059.1

11171.7

13957.4

Per cent of gross domestic product

General government net borrowing (-)/net lending (+)

-1.0

-0.4

-0.2

-0.04

General government consolidated gross debt at nominal value at end of year

14.9

12.4

10.7

9.7

Although from 2004-2007 budget deficit of the general government decreased, it retained negative trend to increase in sub-sector breakdown,- in 2007 in central government sub-sector increasing by 96.7 mln lats and in local government sub-sector by 67.3 mln lats. However, a contrary trend is observed in the social security fund sub-sector where budget surplus during a year increased by 182.4 mln lats. Budget deficit level in Latvia has never exceeded the criteria established by the Maastricht Treaty (3% of GDP).

General government budget deficit or surplus by sub-sectors in 2004-2007, % of GDP


Although the level of general government debt in Latvia is growing year by year and in 2007, compared to 2006, it increased by 165.9 mln lats, however, it did not exceed the criterion established by the Maastricht Treaty (60.0% of GDP). The government debt ratio to GDP continued to decrease. In 2007 it decreased by 1 percentage point and comprised 9.7% of GDP.

General government consolidated gross debt at nominal value, at the end of the year


For calculation of the notification on general government budget deficit and debt in April 2008 provisional data of the Ministry of Finance, Treasury and Central Statistical Bureau have been used. Data will be revised following the receipt of annual information.

On April 18 Eurostat, the Statistical Office of the European Communities, will release information on the results of the April 2008 notification in all EU Member States.

Prepared by the Government Finances Section

tel: 67366963
Vija Veidemane


[1] Due to the improvement of methodology previously published government budget deficit and debt notification data of October 2007 for years 2004-2006 have been revised.
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