Parliament passes Latvia's 2017 budget

After a marathon parliamentary session which lasted 20 hours, lawmakers passed Latvia's 2017 budget in the final reading early on Thursday morning, local media reported.

The budget bill was passed by 59 votes to 36, with no abstentions.

Latvia's government coalition has described next year's budget as the "budget of kept promises" as the government has held to its promise to not raise any of the key taxes.

In 2017, funding will grow for education, health care and defense, which have been declared the top budget priorities. Latvia's defense spending is going to rise the most, reaching 1.7 percent of GDP next year.

The adoption of the 2017 budget took place amid protests against the government's plan to phase out the so-called micro enterprise tax and charge higher social security contributions from low-paid employees.

In 2017, Latvia's budget revenues are planned at 8.1 billion euros (8.9 billion U.S. dollars) and expenditures at 8.4 billion euros. Budget expenditures are expected to grow by 9 percent, or roughly 680 million euros from 2016.

Latvia's budget deficit is projected to rise 0.2 percent next year compared to this year, to 1.1 percent of GDP.

The budget is based on the assumption that the economy will grow by 3.5 percent next year, which is a rather optimistic forecast, given that the European Commission expects Latvia's GDP to grow by 2.8 percent in 2017.

For the first time, Latvia will put aside a fiscal reserve for tougher times. The size of the reserve is planned at 0.1 percent of GDP. (1 euro = 1.06 U.S. dollars) Endit