Latvian gov't approves 2026 budget bill

RIGA, Oct. 14 (Xinhua) -- The Latvian government on Tuesday approved the country's 2026 budget bill along with an accompanying package of draft legislation.

Under the bill, consolidated budget revenue is projected at 16.064 billion euros (18.63 billion U.S. dollars) and expenditure at 17.945 billion euros. Latvia's gross domestic product (GDP) is forecast at 43.953 billion euros, putting the budget deficit at 3.3 percent of GDP and public debt below 55 percent of GDP.

Defense spending is planned at 4.91 percent of GDP, or 2.158 billion euros. Unlike in 2025, next year's revenue growth will outpace expenditure, with income rising by 944.6 million euros year-on-year and spending increasing by 804.3 million euros.

Kaspars Gorkss, head of the Latvian Employers Confederation, criticized the budget for insufficient spending cuts, warning that Latvia continues to spend more than it earns. Meanwhile, teachers' union leader Inga Vanaga welcomed an additional 45 million euros earmarked for education, expressing hope for sustained investment in reforms.

The 2026 budget is based on cautious forecasts of moderate growth and easing inflation. The Finance Ministry expects construction, manufacturing, and trade, along with renewed corporate lending, to drive expansion.

Economic growth is forecast at 1.1 percent this year, 2.1 percent in 2026, and 2.2 percent in subsequent years. The budget still requires approval by parliament in three readings. (1 euro = 1.16 U.S. dollar) Enditem