Press Release

In 2019, general government budget deficit amounted to 63.2 million euros

Provisional1 results (accordingly European System of Accounts (ESA 2010) methodology) compiled by the Central Statistical Bureau (CSB) show that, in 2019 general government* budget deficit accounted for EUR 63.2 million or 0.2 % of the Gross Domestic Product (GDP) and general government consolidated gross debt amounted to EUR 11.24 billion or 36.9 % of the GDP.

General Government Budget Deficit or Surplus and Debt

 

2016

2017

2018

2019

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

general government

38.9

-210.8

-242.9

-63.2

central government

9.9

-227.1

-298.0

-526.5

local governments

53.6

-74.2

-191.1

179.9

social security fund

-24.6

90.5

246.2

283.4

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

10 245.0

10 518.7

10 815.9

11 244.5

As % of GDP

general government budget deficit (-)

surplus (+)

0.2

-0.8

-0.8

-0.2

general government consolidated gross debt

at nominal value at the end of the year

40.9

39.3

37.2

36.9

As compared to operating cash flow data of the Treasury, where consolidated budget deficit in 2019 was EUR 117.6 million, budget deficit calculated by the CSB in accordance with the methodological requirements of European System of Accounts 2010 is EUR 54.4 million or 0.2 percentage points of GDP less.

Most significant methodological adjustments with positive effect (reduces budget deficit) on the general government budget:

  • adjustments in claims against debtors (data of the Treasury) – by EUR 138.1 million or 0.5 % of GDP;
  • adjustments to revenues from auctioning of emission allowances granted to Latvia (data of the Treasury) – by EUR 62.9 million or 0.2 % of GDP;
  • tax adjustments by using the time adjustment method (data of the Ministry of Finance) – by EUR 62.4 million or 0.2 % of GDP;
  • balance of the Deposit Guarantee Fund (data of the Financial and Capital Market Commission) – by EUR 24.5 million or 0.1 % of GDP;
  • adjustments for exclusion of transactions of derived financial instruments (data of the Treasury) – by EUR 19.7 million or

0.1 % of GDP.

At the same time, there have also been adjustments with negative effect (increases budget deficit) on the general government budget:

  • adjustments for balancing foreign financial aid flow (data of institutions involved in administration of foreign funds) – by EUR 124.5 million or 0.4 % of GDP;
  • adjustment for superdividend – EUR 75.3 million or 0.2 % of GDP;
  • adjustments for future payments of the 2nd pillar pension scheme funds (data of the State Social Insurance Agency) – by EUR 22.2 million or 0.1 % of GDP;
  • balance of corporate enterprises of central and local governments reclassified to general government (CSB data) – by EUR 16.2 million or 0.1 % 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 10.8 million or 0.04 % of GDP;
  • adjustments for government investments in state and local government enterprises (data of the Treasury) – by EUR 10.5 million or 0.03 % of GDP.

As compared to 2018, the general government consolidated gross debt in 2019 grew by EUR 429 million or 1.4 % and comprised EUR 11.24 billion.

The previously published data on general government budget deficit and debt for the previous years were recalculated taking into account methodological improvements of the new manual on general government deficit and debt that was elaborated by Eurostat, the statistical office of the European Union. The largest impact on recalculations was left by inclusion of 19 new units in general government sector, such as municipal limited liability companies SIA “Rīgas satiksme”, AS “Daugavpils satiksme”, SIA “Rēzeknes satiksme”, SIA “Liepājas tramvajs”, etc., which both had positive and negative impact on the balance of general government sector.

While carrying out calculations of the April 2020 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 2020 notification in all EU Member States on 22 April.

 

Methodological explanations

 

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 %.

* General government sector includes all central and local government budgetary institutions, the social security fund and the central and local government-financed and controlled enterprises and non-profit organizations selected in compliance with ESA 2010 criteria on government sector formation.

 

Media requests:
Communication Section
E-mail: media@csb.gov.lv
Phone: +371 67366621, +371 27880666

More information on data:
Government Finance Section

Vija Veidemane
E-mail: Vija.Veidemane@csb.gov.lv
Phone: +371 67366963

 

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