After Last Year's Deficit, Latvia's Budget Has Again Turned Surplus

According to the Fiscal Discipline Council (FDC), by the end of August, Latvia's consolidated total budget was executed with a surplus of 127.6 million euros. For comparison, a year earlier, the deficit for the same period was 257 million euros. The main contribution to the positive balance came from the state special budget, which reached a surplus of 417.5 million euros. Local government budgets finished the eight months with a surplus of 75.3 million euros, while the budgets of derived public entities had a surplus of 73.3 million euros. However, the state basic budget remains in deficit, with a negative balance of 438.4 million euros. Budget revenues continue to grow faster than expenditures. From January to August, revenues increased by 9%, or 1.1 billion euros, compared to the same period last year. The Fiscal Discipline Council explains this mainly by the more active inflow of funds from European Union funds. Expenditures also increased, but at a more moderate pace — by 5.7%, or 692.1 million euros. This was facilitated by a decrease in spending on goods and services, a reduction in current payments to the EU budget, and a more restrained growth in labor costs, subsidies, and grants. This means that the budget is currently receiving funds faster than it is spending them. However, this situation may change throughout the year as state programs and investment projects are implemented. The law on the state budget for 2026 provides for consolidated budget expenditures of 20.9 billion euros. According to the FDC, by the end of August, these should have amounted to about 13 billion euros, while in fact, 12.9 billion euros were spent — 94.4 million euros, or 0.7%, less than the projected level. The Fiscal Discipline Council notes that budget execution is gradually approaching the planned indicators. So far, the data for the first eight months do not indicate a significant deviation from the approved plan. As of the end of August, 61.9% of the annual expenditure plan had been executed, while revenues reached 68.4% of the planned volume. The FDC expects that as the year comes to a close, the pace of budget execution will gradually stabilize.