The Budget Did Not Add Up: The Deficit Reached 4.1% of GDP

Photo: LETA

The deficit in the balance of the consolidated aggregate budget in December of last year amounted to 4.1% of the gross domestic product (GDP), or 1.7 billion euros in monetary terms, according to data from the Fiscal Discipline Council (FDC).

Taking into account the adjustments of the European System of Accounts (ESA), the deficit amounted to 2.9% of the projected GDP. The actual deficit will be clarified in accordance with the actual GDP data and ESA adjustments.

A year earlier, during the same period, the deficit was 1.8%, or 733.1 million euros.

As noted by the Fiscal Discipline Council (FDC), in 2025, budget revenues increased by 3.5%, or 606.7 million euros, while in 2024, they increased by 9.9%.

The lower growth rates of revenues in 2025 are associated with low growth rates of tax revenues (5.6%), as well as a decrease in non-tax revenues by 6.1% and a decrease in revenues from EU funds by 6%.

Budget expenditures last year increased by 9.2%, or 1.6 billion euros.

According to the FDC, at the end of December 2025, there was a surplus of 475.2 million euros in the state special budget, while the main state budget and local government budgets had a deficit of 2.2 billion euros and 47.2 million euros, respectively.

In December of last year, the revenues of the consolidated aggregate budget amounted to 1.8 billion euros, while expenditures were 2.5 billion euros.

In the main budget, revenues in December amounted to 1.2 billion euros, while expenditures were 1.7 billion euros. Revenues of the special budget amounted to 463.3 million euros, while expenditures were 461.7 million euros. Revenues of local government budgets amounted to 360 million euros, while expenditures were 491.5 million euros.

In December, the largest share of total budget expenditures was accounted for by subsidies and grants (25%), social payments (21%), and salaries (21%). The most significant growth was observed in capital expenditures and social payments - by 21.7% (64.5 million euros) and 20.3% (91.4 million euros), respectively, compared to December 2024.

Due to the sharp increase in salary expenditures in the public sector, the government committed to limiting the growth of the wage fund in 2025 to 2.6%. In 2025, labor costs increased by 6.4%.