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Latvian government approves 2019 budget draft

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUOn Tuesday, 5 March, Latvia’s Cabinet of Ministers approved a legislative draft for the state budget of 2019, as confirmed by Finance Ministry’s representatives.

2019 state consolidated budget’s revenue is planned at EUR 9.2 billion, whereas expenditures are planned at EUR 9.4 billion. Base budget’s planned revenue is EUR 6.4 billion, whereas expenditures are planned at EUR 6.8 billion. Revenue of the state special budget is planned at EUR 3 billion, whereas expenditures are planned at EUR 2.8 billion. The deficit of the 2019 general government budget is planned at 0.5% of GDP. GDP growth for 2019 is planned to be 3%.

Last year, members of the government continued reviewing state budget expenditures during talks with ministries. As a result, ministries prepared proposals to increase funding for their respectable industries. Focus is put on efficiency in use of state real estate properties and ICT industry’s optimization, as well as review of allocated funding. The result of total review of expenditures in 2019 is EUR 51.3 million. Of this amount, EUR 7.6 million will be diverted to the improvement of the general fiscal space, whereas EUR 43.7 million will be allocated for different priorities of the country’s priorities.

This year’s budget includes an additional amount of EUR 87.5 million, which will be allocated to increase teachers’ wages. EUR 8.9 million will be used to increase wages of judges and prosecutors, as well as EUR 4.8 million will be allocated to increase of wages of social care workers. EUR 41.3 million is planned to be allocated as support for retirement pensions for interior affairs and justice sector officers with special ranks.

EUR 7.2 million is planned to be allocated to finance implementation of recommendations from Moneyval.

Additional EUR 3 million is intended to increase accessibility of medicines for patients suffering from rare diseases. EUR 2.7 million is planned to help increase benefits for children and disabled adults. EUR 5.4 million is planned to be allocated to cover costs of the Maintenance Guarantee Fund. EUR 10.4 million is planned to be allocated to ensure pension indexation and support for the spouse of recently diseased pensioner.

EUR 3 million will be allocated to improve the function of independent institutions, such as public media, Ombudsman’s Bureau, State Audit and other institutions. EUR 2.6 million will be allocated from the state budget to support Latvian diaspora.

In 2019, it is planned to allocate EUR 60.3 million more to the country’s defence sector.

During the budget development process, the government held internal talks and talks with social and cooperation partners, as well as industry associations and municipalities. As a result of those talks, the Cabinet of Ministers and Latvian Association of Local Government have signed an agreement. An agreement was reached in multiple subjects important to municipalities – tax and non-tax revenue, state budget grants and specific grants to support construction of apartment homes in regions. At the same time, an active discussion was held in regards to tax revenue of municipal budgets and lending conditions for municipalities in 2019.

The temporary basic guidelines for the 2019 budget detail that the state policy will remain unchanged and in accordance with it municipal budget revenue together with special grants will be EUR 1.47 billion or 19.6% from total budget tax revenue (without state social insurance fees to finance healthcare).

It should be said that the government is committed to guaranteeing municipalities with PIT outlook of 100%, which allows municipalities to expect stable revenue for their budgets.

The state budget project is planned to be submitted to the Saeima on Friday, 8 March.


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