Latvia Economic and Fiscal Outlook

CURRENT STRONG FOCUS ON GROWTH FRIENDLY EXPENDITURE AND COMMITMENT TO FURTHER REFORMS RRF and EU financing will support the implementation of the crucial investment and reform measures, including climate and digitalisation Change in the share of growth friendly expenditure, by Member State (2001-2019, % primary expenditure) Recovery and Resilience plan (RRF) (Adopted by the Council on July 13, 2021) 4 -4 -8 LRETTENKIN REINCENN Source: EC Report on Public Finances in EMU 2021 EU Funds after 2020 (EU Cohesion policy Programme to be adopted by the end of 2022) 5% 4% 19% ■ Smarter Europe 968 M € 29% 5 bn EUR 24% 19% 16 Source: Ministry of Finance ■ Greener Europe 1175 M € ■ Connected Europe 919 M € 10% 37% 20% 1.82 bn EUR ■Climate 676.2 M € ■Rule of law 37 M € ■ Economic transformation 196 M € Digital transformation 365.2 M € ■Reducing disparities 370 M € 20% 11% ■ Health 181.5 M € Source: Ministry of Finance CLIMATE DIGITAL TRANSFORMATION REDUCING DISPARITIES ECONOMIC TRANSFORMATION RULE OF LAW Reforms in Latvia under RRF (D) At - - Transition to sustainable transport, energy efficiency in all sectors, wind farms Coordination mechanisms for public digital services, digital skills Administrative territorial reform, GMI reform Healthcare network effectiveness, remuneration reform Innovation eco-system, consolidation of higher education institutions Strengthening capacity of law enforcement agencies ■ Social Europe 1461 M € ■ Europe closer to citizens 263 M € ■ Just Transition Fund investments 217 M € ■ Capacity building measures (TA) 5 M€ HEALTH

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