Latvia's Economic Response to Covid-19
Fiscal Sustainability Remains Top Priority
Prudent fiscal management has produced low budget deficits well below the EU-28 average over the past 8 years. The spread of Covid-
19 and support measures for mitigating the consequences thereof are expected to significantly impact fiscal indicators of Latvia in
short term.
General Government Budget Balance
(% of GDP)
Budget Balance (2019, % GDP)
2014
2015
2016
2017
2018
2019
2020
2021
2022
2.0
0.2
0.0
-2.0
-0.8 -1.0
-0.8
-0.6
-0.8
-3.9
-1.6
-1.4
-1.7
-0.7
-2.4
-4.0
-2.9
-5,5
0.6
EU-28: (-0.8%)
-4.5
-6.0
-5.3
-6.1
-8.0
-10.0
* indicative current (end of February) estimation of
fiscal balance based on approved, anticipated and
potential new Covid-19 related measures, subject to
further decisions and pandemic situation development
-8.4
■Latvia
■ EU-28
-9,4*
France
Belgium
Finland
Latvia
Estonia
AA/Aa2/AA AA/Aa3/AA- AA+/Aa1/AA+ A+/A3/A- AA-/A1/AA
Czech
Austria
AA-/Aa3/AA-AA+/Aa1/AA+
Source: Eurostat, MoF estimate, Law on Medium-term Budget 2021-2023, AMECO Autumn forecast
2020
Support measures to mitigate Covid-19 crisis
(as of February 21, 2021) (EUR, Billion)
2.5
2.0
1.3
1.5
1.0
0.5
0.0
Actual Support in
2020
2.6
Approved Support for
2021*
* Approved amount of support as of February 21st, 2021. Amount may change during
the course of 2021, subject to further decisions and pandemic situation development
21 Source: Ministry of Finance
Source: Eurostat
2021 Budget: Expenditure for priorities*
344,4
2021
2022
345,5
•
(EUR, million)
Salary increase for the medical personnel,
teachers, officials of the justice system
• Minimum remuneration rate increase for the
academic staff
⚫ Enforcement of the Constitutional
judgments in the field of welfare
Court
Implementation of the housing guarantee support
program
343,1 2023
•
Compensation for the loss of delivery of the
subscribed press publications
•
Support for the Latvian School Youth Song and
Dance Celebration
• Withdrawal of the social media from the
advertising market
*Does not include Covid-19 which is as a high priority
Source: Ministry of FinanceView entire presentation