Latvia Posts 1.085 Billion Euro Budget Deficit for 2025
Latvia recorded a general government budget deficit of 1,085 miljardi euro, or 2.5% of gross domestic product (GDP), in 2025 according to data compiled by the Central Statistical Bureau. Bauskasdzive.lv reported that, under the European System of Accounts (ESA 2010) methodology, the deficit grew by 340 million euros compared to the previous year. At the same time, the consolidated gross debt of the general government reached 20,2 miljardi euro, or 46.2% of GDP, marking a 1,4 miljardiem euro increase over the course of the year. General government expenditures climbed by 7.6% to 19,8 miljardus euro, while revenues rose by 6% to hit 18,7 miljardus euro.
Methodological Adjustments Diverge From Cash Flow Figures
The statistical bureau’s deficit calculation sits 0,7 miljardiem euro, or 1.6 percentage points of GDP, lower than the 1,8 miljardi euro cash flow deficit reported in the Ministry of Finance annual report. The gap stems from methodological adjustments applied under ESA 2010 standards. Positive adjustments that shrank the recorded deficit include 438,6 miljoni euro (1% of GDP) for the use of Recovery and Resilience Facility funds, 370,6 miljoni euro (0.8% of GDP) for debtor claims, 136,5 miljoni euro (0.3% of GDP) for financial transactions exclusion, 40,5 miljoni euro (0.1% of GDP) for time-adjusted tax corrections, 32,6 miljoni euro (0.1% of GDP) for receivable interest, and 30,7 miljoni euro (0.1% of GDP) for unallocated payments in the single tax account.
Conversely, other adjustments widened the deficit figure. Foreign financial assistance flow balancing added 102,5 miljoni euro (0.2% of GDP), future payout provisions for second-pillar pension funds accounted for 77,3 miljoni euro (0.2% of GDP), Modernization Fund spending totaled 40 miljoni euro (0.1% of GDP), and creditor liabilities stood at 28,4 miljoni euro (0.1% of GDP). Additional adjustments covered security premium allocations at emission of 27,6 miljoni euro (0.1% of GDP), receivable interest of 24,3 miljoni euro (0.1% of GDP), and the gap between accrued and paid interest at 21,6 miljoni euro (0.05% of GDP).
Central Statistical Bureau Revises Budget Figures for EU Funds
Previously published general government budget figures for the 2022 to 2024 period underwent administrative revisions. The Central Statistical Bureau adjusted those prior years to account for updated financial instrument accounting practices regarding European Union funds.