Latvia Economic and Fiscal Outlook
SUPPORTIVE FISCAL POLICY IN 2020-2022 AND GRADUAL RETURN TO
<<<NORMALITY>>>
Government commitment of annual 0.5% of GDP budget deficit reduction
2.0
During COVID-19 crisis the general government deficit has
increased more than just for the fiscal impact of the
temporary (one-off) support
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Fiscal strategy 2023- 2025
(expenditure exempted from the rule - defence investments and energy
support package)
Structural deficit
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
0.2
0.0
-0.8
-0.8
-0.6
- 2.0
-1.2
-1.6 -1.4
- 4.0
- 6.0
- 8.0
IN
-4.5
-6.5
-7.2
1.0
0.3
0.0
-0.9
-1.8
- 1.0
-0.3
-0.3
-0.8
-2.4
-0.8
-1.5
-1.2
-1.1
- 2.0
-1.3
-2.0
-1.6
-1.9
-1.5
- 3.0
-2.0
-2.5
- 4.0
-3.5
Deficit
-Deficit excluding temporary support (COVID, energy)
Source: Eurostat, Latvia Stability Program - April 2022
4.0
2.0
Emergency COVID -19 package and supportive fiscal policy
pushed deficit to one of highest in EU
General government budget deficit in 2021
(% of GDP, results of the EDP notification in spring 2022)
0.0
- 2.0
- 4.0
- 6.0
- 8.0
- 10.0
- 8.0
7.4
- 7.3
- 7.2
- 7.1
- 6.9
- 6.8
- 6.5
- 6.2
- 5.9
5.9
Malta
Greece
Latvia
15
Source: Eurostat
Iitaly
Romania
Spain
Hungary
France
Slovakia
Austria
Czechia
Belgium
Slovenia
4.1
3.7
- 5.5 5.2
Bulgaria
Germany
Croatia
2.9 2.8 2.6 2.5 2.4 1.9 1.9 1.7
Portugal
Finland
Netherlands
Estonia
Ireland
Poland
Cyprus
Lithuania
0.2
1.0
Sweden
Denmark
Luxembourg
2013
2014
2.3
1
0.9
0
Structural balance, as of 2023 forecast for no policy change scenario
Structural balance objectives
Nominal deficit
(General Government deficit according to ESA methodology)
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
0.2
-1
- 0.8
-2
- 1.2
-0.8
- 1.6
- 1.4
-3
-4
-5
-6
-7
ON 3 4 5 6 7 ā
-8
Source: Eurostat, Latvia Stability Program
-
April 2022
-0.6
1.3
0.8
Deficit in the no-policy
change scenario
Ī
Hy
3.7
Deficit including temporary
support measures
- 2.8
- 2.3
- 1.7View entire presentation