Financier, former Minister of State Property (1993–1994) and Minister of Finance (1999–2000) Edmund Krasinš noted in the TV24 program “Press Club” that savings in the state budget are largely just an illusion, writes LA.lv.
“If there are no loud cries and moans about the withdrawal of funds, it means that nothing has been saved,” he emphasized.
Krasinš explained that Latvia continues to plunge into debt – before the pandemic, the national debt was less than 40%, and next year it will exceed 55%.
“This is the path of Greece,” the financier warned.
“Politicians buy voters' votes by promising various benefits, but all of this is paid for through borrowing.” He reminded that such a policy led Greece to insolvency: “They could no longer service their debts.”
Krasinš also noted that Latvia has no budget surplus to cover old debts. Old debts are being refinanced, while interest payments are increasing. “If previously we borrowed at 0%, now such rates are no longer available – every year we will have to pay more,” he explained.
“Soon there will simply be no money left for this,” Krasinš added.
According to information provided by the LETA agency, compared to the 2025 budget, in 2026 the growth of state budget revenues will exceed the growth of expenditures. State budget revenues are planned to increase by 944.6 million euros, while expenditures will rise by 804.3 million euros.
The revenues of the main budget will amount to 10.9 billion euros, while expenditures will reach 13.2 billion. In the special budget, revenues are planned at 5.5 billion euros, and expenditures at 5.1 billion.
Latvia's gross domestic product (GDP) is projected to be 43.953 billion euros next year in current prices; accordingly, the budget deficit will be 3.3% of GDP, and the national debt will not exceed 55% of GDP.
General government expenditures next year will decrease to 47% of GDP compared to 47.5% this year. At the same time, despite the overall reduction in expenditures, defense spending will increase.
Overall expenditures for next year have been reduced by 171 million euros. Priority activities are allocated 693.5 million euros, of which 448.3 million is for defense and security.
The Ministry of Finance emphasizes that the state budget for 2026 and the medium-term budget framework for 2026–2028 have been prepared in accordance with the fiscal discipline rules of the European Union (EU) and national regulations.
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