Notification on General Government Budget Deficit and Debt in October 2008


According to results of the October 2008, general government budget deficit and debt notification*, which were prepared in conformity with methodology of European System of Accounts ESA’95, the general government surplus in 2007 reached 8.7 mln lats or 0.1% of Gross Domestic Product (GDP) and the general government debt was 1331.3 mln lats or 9.5% of GDP indicates data of Central Statistical Bureau.

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 at current prices must not exceed 3% and the ratio of the government debt to the Gross Domestic Product at current prices must not be higher than 60.0% which are calculated in conformity with ESA’95 requirements.

Government budget deficit and debt notification indicators submitted to the European Commission have never exceeded criteria set in the Maastricht Treaty.

October 2008 government budget deficit and debt notification: main indicators[1]





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

General government





   Central government





   Local government





   Social security fund





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





Gross domestic product at current prices, mln LVL





Percent of gross domestic product

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





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





Although, in 2007 general government budget surplus has been found, opposite tendency has been observed in breakdown by subsectors. Thus, during 2007 budget deficit in central government subsector increased by 102.0 mln lats and in subsector of local governments – by 47.6 mln lats. During a year surplus of social security fund subsector has increased by 182.4 lats, thus covering budget deficit of central government and local governments’ subsectors and even generating small surplus.

General government sector deficit or surplus by subsectors in 2004-2007, % of GDP

Even thought general government sector debt value in Latvia increases with every year, its relation over GDP decreases with every year. As in 2007, compared to 2006, debt value increased to 140.8 mln lats, its relation over GDP, has decreased by 1.2 percentage points, respectively.

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

In the calculations of notification of October 2008 data from the Ministry of Finance, the Treasury, the Ministry of Economics and Central Statistical Bureau are used.

On October 22 the EU Statistical Office Eurostat will release information on the results of the October 2008 notification in all EU member states.

* 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.

[1] Previously published data on general government budget deficit and debt in April 2008 notification for 2005 and 2007 are adjusted.

Prepared by the Government Finances Section
Tel. +371 67366963
Vija Veidemane