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Expenses growing faster than revenues in Latvian budget this year: Finance Ministry

Xinhua, September 26, 2015 Adjust font size:

Although the Latvian government budget was still showing a surplus after the first eight months of 2015, budget expenses have been growing at a faster rate than revenues this year, the Finance Ministry said Friday.

The budget surplus accumulated during the eight months of this year was by 63.2 million euros smaller than a year ago and was worth 249.2 million euros, the ministry said.

"Yet notwithstanding the surplus, the Finance Ministry is drawing attention to the usual tendency for budget expenses start growing at a faster rate towards year-end, which significantly worsens the balance sheet," the Finance Ministry warned, predicting that like in previous years this is going to lead to a budget deficit also this year.

In the first eight months of 2015, Latvia's budget revenues rose by 4.9 percent against the same period last year to 6.073 billion euros, the ministry said, indicating that the increase was ensured mainly thanks to tax revenues which grew by 4.5 percent as compared to January-August 2014. Still, this was 20.6 million euros, or 0.4 percent short of the eight-month tax revenue target.

Meanwhile, Latvia's budget expenses grew 6.4 percent year-on-year in the eight months of 2015, reaching 5.823 billion euros at the end of August, mostly because of increased spending on social benefits and wages.

The government now projects Latvia's budget deficit to reach 1.4 percent of GDP this year, which would be 0.1 percentage points less than planned in the spring. Endit