The government approved the draft state budget for 2026 on Tuesday, with revenues amounting to €16.064 billion and expenditures totaling €17.945 billion.
Compared to the 2025 budget, the growth of budget revenues will exceed the growth of expenditures - revenues are planned to increase by €944.6 million, while expenditures will rise by €804.3 million.
The revenues of the main budget will amount to €10.9 billion, and expenditures will total €13.2 billion. In the special budget, revenues are projected at €5.5 billion, and expenditures at €5.1 billion.
The forecast for Latvia's gross domestic product (GDP) next year at current prices is €43.953 billion, with a budget deficit of 3.3% of GDP, and the national debt will not exceed 55% of GDP.
General government sector expenditures next year will decrease to 47% of GDP compared to 47.5% this year. Alongside the reduction in total expenditures, defense spending will increase.
Overall, expenditures for the next year are reduced by €171 million. Funding for priority measures is allocated at €693.5 million, including €448.3 million earmarked for defense and security needs.
According to the Ministry of Finance, the draft state budget for 2026 and the medium-term budget framework for 2026-2028 have been developed in accordance with European Union rules and national fiscal discipline norms.
The budget for next year includes additional funding for enhancing state security, supporting families with children, and education. Also, as noted by the Ministry of Finance, investments from EU funds amounting to over €1 billion are planned, and local government revenues will increase by €151.4 million.
As indicated by the Ministry of Finance, the budget for 2026 is based on cautious macroeconomic forecasts that anticipate moderate economic growth and a gradual decrease in inflation.
Economic growth this year is projected at 1.1%, next year at 2.1%, and in subsequent years up to 2.2%.
The inflation forecast for 2025 has been raised to 3.5%, primarily due to rising food prices and heating tariffs. In the following years, the Ministry of Finance predicts a gradual decrease in inflation - to 2.3% in 2026 and to 2.2% in subsequent years.
The budget deficit in 2025 is projected at 2.9% of GDP, increasing to 3.3% in 2026, and in the medium term, it will be around 3.6%.
Overall, for the priorities set by the government, funding of €693.5 million is planned for 2026, €724.8 million for 2027, and €935.9 million for 2028. A significant portion of these funds - €448.3 million - will be directed towards enhancing security: increasing the combat capability of the National Armed Forces, developing military infrastructure, border security systems, supporting the local defense industry, and creating new jobs.
The total defense funding next year will amount to €2.2 billion, or 4.9% of GDP.
An additional €94.8 million is allocated to support families with children and improve maternal and child health care, while overall healthcare funding will increase by €27.9 million to €1.9 billion.
In the education sector, €45 million is allocated for the implementation of a new teacher salary model "Program in School." Additional funds are also allocated for socially important measures - expanding palliative care, improving access to social and rehabilitation services.
As noted by the Ministry of Finance, one of the incentives for economic growth next year will be funds from EU sources, which will exceed €1 billion.
The accompanying package for the draft state budget includes nearly 50 bills. The budget package for 2026 is planned to be submitted to the Saeima on Wednesday, October 15.
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