In 2020, general government budget deficit accounted for EUR 1.3 billion or 4.5% of the Gross Domestic Product (GDP) and general government consolidated gross debt amounted to EUR 12.7 billion or 43.5% of the GDP.
Under the impact of Covid-19 pandemic in 2020 general government revenues, compared to 2019, reduced by 0.4% and comprised EUR 11.5 billion.
Expenditures increased by 9.5% and reached EUR 12.7 billion, of which EUR 0.8 billion were expenditure on Covid-19 support measures for the national economy, according to provisional results based on European System of Accounts (ESA 2010) methodology and compiled by the Central Statistical Bureau of Latvia (CSB).
As compared to operating cash flow data of the Treasury, where consolidated budget deficit in 2020 was EUR 1148.9 million, budget deficit calculated by the CSB in accordance with the methodological requirements of European System of Accounts 2010 was EUR 177.7 million or 0.6% of GDP more.
The most significant methodological adjustments with positive effect (reduces budget deficit) on the general government budget: adjustments to state aid programs issued to the Development Finance Institution Altum (data of the Treasury) – EUR 138.4 million or 0.5% of GDP; adjustments to claims against debtors (data of the Treasury) – by EUR 79.6 million or 0.3% of GDP; tax adjustments by using the time adjustment method (data of the Ministry of Finance) – by EUR 41.5 million or 0.1%; adjustments for exclusion of transactions of derived financial instruments (data of the Treasury) – by EUR 25.5 million or 0.1%; balance of the Deposit Guarantee Fund (data of the Financial and Capital Market Commission) – by EUR 18.4 million or 0.1%; adjustments between accrued and paid interest (data of the Treasury) – by EUR 14.8 million or 0.1%; adjustments to revenues from auctioning of emission allowances granted to Latvia (data of the Treasury) – by EUR 9.6 million or 0.03%.
At the same time, there have also been adjustments with negative effect (increases budget deficit) on the general government budget: adjustments for government investments in central and local government enterprises (data from the State Treasury) – by EUR 300.4 million or 1% of GDP; adjustments for balancing foreign financial aid flow (data of institutions involved in administration of foreign funds) – by EUR 85.7 million or 0.3%; adjustment for super dividend – EUR 48.8 million or 0.2%; adjustments to obligations against creditors (data of the Treasury) – by EUR 35.2 million or 0.1%; adjustments for future payments of the second pillar pension scheme funds (data of the State Social Insurance Agency) – by EUR 28.9 million or 0.1%; balance of central and local governments reclassified to general government (CSB data) – by EUR 6.1 million or 0.02%.
Taking into account the increasing volume of borrowings affected by financing needed to reduce the consequences of Covid-19, in 2020, compared to 2019, general government debt rose by EUR 1.5 billion and reached EUR 12.7 billion or 43.5% of GDP. (BNN/Business World Magazine)
YOUR ADV. here FREE