The indicative fiscal space or additional expenditures of the 2022 Latvian state budget are estimated at EUR 300 million. Budget deficit is planned at 3.8% of GDP, according to the Ministry of Finance.
On August 24, that Cabinet of Ministers will consider a number of topics related to the 2022 state budget, including fiscal space, budget base, priority activities, as well as a review of ministries’ expenditures. The Ministry of Finance does not provide more detailed information regarding the topics the government plans to review, as discussions still continue.
At the same time, the ministry does say that the fiscal space for additional expenditures in 2022 is about EUR 300 million, which may have an effect on next year’s budget base.
The ministry adds that the fiscal space is set for current expenditures, not all general government expenditures.
“With these finances it is possible to support additional investment projects that have major fiscal influence for 2022. If need be, these finances may be used to battle Covid-19,” the ministry adds.
The 2022 budget deficit is planned at 3.8% of GDP as long as the only additional expenditures are current expenditures within the fiscal space. Finance Ministry stresses that an accurate budget deficit will be made available at a later stage of the budget composition process.
This year’s budget deficit is estimated at 3.9% of GDP. However, according to the stability program prepared by the Ministry of Finance, the support measures used to reduce the impact of Covid-19, this year’s budget deficit may reach 9.3% of GDP. (BNN/Business World Magazine)
