Latvia - Public finance

Latvia's structural transition out of the planned economy under communism has occurred more or less spontaneously since independence. As of 2002, the thriving private sector accounted for two-thirds of employment and GDP. Privatization is generally considered to be near-finished; although the government still owns a few key companies, most are in private hands, even the utilities, and the government is working to sell off its ownership of what remains in order to satisfy its commitments to the IMF.

The US Central Intelligence Agency (CIA) estimates that in 2002 Latvia's central government took in revenues of approximately $2.4 billion and had expenditures of $2.6 billion. Overall, the government registered a deficit of approximately $200 million. External debt totaled $3.4 billion.

The following table shows an itemized breakdown of government revenues and expenditures. The percentages were calculated from data reported by the International Monetary Fund. The dollar amounts (millions) are based on the CIA estimates provided above.


Tax revenue 86.2% 2,070
Capital revenue <0.1% 1
Non-tax revenue 6.5% 156
Grants 7.2% 173
EXPENDITURES 100.0% 2,600
General public services 5.5% 144
Defense 3.1% 81
Public order and safety 7.0% 181
Education 6.3% 163
Health 11.0% 287
Social security 40.8% 1,060
Housing and community amenities 1.2% 31
Recreation, cultural, and religious affairs 1.8% 48
Economic affairs and services 11.5% 300
Other expenditures 8.3% 216
Interest payments 3.5% 90
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