On October 14, the government approved the draft law on the 2026 state budget. The Ministry of Economics (MoE) requested expenditures of EUR 200,527,774 in its budget proposal, including EUR 133,646,283 for the implementation of the state’s core functions and EUR 66,881,491 for the implementation of foreign aid projects.
The majority of the budget—EUR 170.5 million—is allocated to various support measures aimed at enhancing business competitiveness and economic growth, including attracting investments, supporting innovation, and promoting the export capacity of companies.
The main budget priorities will also include measures to foster a favorable and safe environment, amounting to EUR 25.8 million, and support for implementing competition policy, amounting to EUR 4.2 million.
“Given the need to implement austerity measures, the Ministry of Economics has reduced expenditures by EUR 9.5 million in the 2026 budget preparation process. At the same time, various support measures for entrepreneurs remain in place to promote exports, competitiveness, and innovation. Special attention will be paid to promoting exports and increasing private investments, thereby ensuring sustainable economic growth,” emphasizes Minister of Economics Viktors Valainis.
The Ministry’s main initiatives in 2026 will include identifying specific investment needs in the national economy, attracting foreign investors, and implementing measures to develop a unified national brand for Latvia and strengthen international competitiveness.
Efforts will also focus on implementing high-achievement, commercially-oriented science and research projects, as well as developing large investment projects to support economic transformation.
The MoE plans to allocate significant funding in 2026 for a loan program for large investment projects, for promoting exports and attracting investments, and for assisting large families under the “BALSTS” program.
Investment projects under financial instruments will receive EUR 40 million, ensuring the operation of the loan program. Entrepreneurs will be able to receive support of up to EUR 10 million, or a capital discount of up to 30% of costs, thus promoting export opportunities. It is estimated that, after project completion, exports of at least approximately EUR 90 million per year will be generated, reaching around EUR 450 million over five years.
Additionally, EUR 18.4 million will be allocated for export market development and attracting investments, which will support growth in the tourism sector, expand export opportunities, attract foreign investments, and enhance the international competitiveness of Latvian businesses.
EUR 5.5 million will be allocated to support large families under the “BALSTS” program, reducing housing cost burdens and assisting in purchasing or constructing living spaces.
EUR 4.3 million is planned for the continuation of long-term research programs under the Innovation Fund in 2026. Support for the startup ecosystem will also continue, with EUR 400,000 allocated in the 2026 state budget for this purpose.
EUR 66.9 million will fund the development and implementation of programs under the Recovery and Resilience Mechanism (RRM) and EU funds for the 2021–2027 planning period to promote corporate energy efficiency, strengthen energy independence, support digital transformation, increase productivity, and provide short-term export credit guarantees for companies in EU and OECD countries.
Next year’s budget will also implement activities aimed at human capital development to improve STEM skills, promote regional labor mobility, attract highly qualified employees, develop skills in line with evolving labor market requirements, and enhance public understanding of lifelong learning.
During the budget preparation process, the MoE identified opportunities to reduce 2026 expenditures by EUR 9.5 million while maintaining support programs for entrepreneurs.
The draft budget package is scheduled to be submitted to the Saeima on Wednesday, October 15.