The EU should take on joint debt to finance defence spending, Gediminas Simkus, board chairman of the Bank of Lithuania, stated, BNS reports. Speaking in an interview with Politico, Simkus called for “more unity in defence” in the EU, noting that the European defence industry market was still very fragmented. He said that the “time…
Latvia’s general government deficit totalled EUR 849.6mn in 2024, according to the methodology of the European System of Accounts (ESA 2010), the Ministry of Finance announced, LETA reports. The deficit amounted to 2.1% of GDP, which was 0.3 percentage points lower than in 2023. The general government debt totalled EUR 19bn at the end of…
The Latvian parliament, the Saeima, has approved the state budget for 2025, LSM reports. The budget foresees revenues of EUR 18.4bn, while expenditure is planned at EUR 19.7bn. The estimated budget deficit will thus amount to EUR 1.3bn or 2.9% of the GDP. The key budget priorities are internal and external security and competitiveness. The…
Estonia’s three-party coalition government has reached agreement on tax changes, Prime Minister Kristen Michal announced, ERR reports. He said that the government would raise the corporate profit tax, personal income tax, and VAT to finance increased spending on defence. The government will raise the VAT rate by 2 percentage points as of 1 July 2025…
Estonia’s Ministry of Finance has proposed postponing the introduction of a unified tax-free income threshold until 2026, ERR reports. The ministry said that the move would ensure that Estonia’s state budget deficit did not exceed 3% as required under EU law. Under the current system, gross income of EUR 1,200 per month is exempt from…
Lithuania’s GDP growth will amount to 2.4% in 2024 and 2.6% in 2025, according to the International Monetary Fund’s (IMF) latest forecast, BNS reports. The country’s economic growth will be driven by the growth of real wages, public investments, and low inflation, the IMF report states. Average annual inflation will reach 1.2% in 2024, the…
Estonia’s three-party coalition of the Estonian Reform Party, Social Democratic Party (SDE), and Estonia 200 has published its new coalition agreement, ERR reports. Under the agreement, the coalition pledges to cut the budget deficit to 3% of GDP in 2025 and 2026, and to reduce it further in 2027. The new government will raise most…
Slowing inflation and strong wage growth in Estonia have increased people’s purchasing power, according to the Bank of Estonia, BNS reports. In June 2024, the consumer price index rose by only 2.5% on year, which was the slowest rate in three years, primarily due to falling energy prices. At the same time, most services have…
International rating agency Moody’s has reaffirmed Latvia’s credit rating at A3 with a stable outlook, LSM reported. The agency noted the stability of Latvia’s public finances and general government debt. Moody’s expects the general government deficit to be around 2.9% of GDP in 2024 and to gradually decline to 2.6% in 2025 and to 1.7%…