When assessing the most acute needs of Latvia’s economy, the Ministry of Economics has submitted to the Ministry of Finance a list of priority measures that would require additional state budget funding of a total of 355,659,515 euro in 2023, allocating the majority for important measures to strengthen energy security – 216,162,050 euro, including the provision of the population with industrial goods of first necessity in the case of national threats, the purchase of which has never been financed until now.
Over the next seven years, investments from the multiannual budget of the Recovery Fund and the EU Structural Funds will provide significant support to boost productivity, digitisation, export and competitiveness of our entrepreneurs. At the same time, however, we still continue to fight the consequences of the Covid-19 pandemic, we are trying to recover from the shock of the rapid jump in energy prices and painfully feel the economic consequences of Russia’s ruthless war in Ukraine. Therefore, additional public funding is needed to ensure that we are prepared for crisis situations. In the next year’s priority measures the Ministry of Economics has earmarked most of the funds for strengthening energy security and independence so that households and entrepreneurs continue to feel safe about both the availability of thermal energy and the ability to pay utility bills. Similarly, an important section in priorities is earmarked for promoting entrepreneurs’ growth and financial accessibility, investment of science in the economy, housing affordability and improving energy efficiency, in order to raise both our economic indicators and the welfare of the population,” the Minister of Economics Ilze Indriksone indicates.
216,162,050 euro would be required to strengthen energy security and for other measures to overcome crisis situations, including for the purchase of natural gas and oil stocks for overcoming crisis situations – 200,000,000 euro; for providing people with industrial goods of first necessity in case of national threats – 12,445,960 euro; for starting the implementation of the Latvian-Estonian joint offshore wind energy project (ELWIND) – 1,920,660 euro; for ensuring Latvia’s accession to the International Energy Agency – 810,990 euro, as well as for other measures to strengthen national security – 984,440 euro. At the same time, the Ministry has pointed out that it would be important for the Latvian state to provide independent funding for undertakings for energy efficiency measures and for the transition to RES, which would not be dependent on gaps in European Union funding.
Measures to boost business growth, competitiveness and financial accessibility, which will get no EU funding in the coming years, would require additional 107,190,000 euro from the national budget, including 100,000,000 euro for investments in the development of large export-oriented projects of businesses important for the national economy; 3,190,000 euro for the provision of export insurance services to Latvian companies; as well as 4,000,000 euro for setting up a fund that will invest in new listed Latvian companies.
In turn, additional 7,127,853 euro are needed to boost exports of companies and tourism in Latvian regions, including 908,000 euro for the implementation of marketing activities of Latvia as a tourist destination; 2,766,666 euro for promoting exports for large enterprises and business incubation services in regions; 453,187 euro for the preparation for Latvia’s participation in the international exhibition Expo 2025 in Osaka, Japan; as well as 3,000,000 euro for initial investments in the fund of the Investment and Development Agency of Latvia with a view to promoting the development of innovative business in Latvia through capital investments in the equity capital of early-stage deep technology SMEs. At the same time, the Ministry emphasised that 20,000,000 euro would be necessary for 2024-2025 for annual investments in large-scale tourism projects that would be able to compete with tourism offers from other countries in the region.
Additional 14,930,581 euro would be necessary to increase the affordability, quality and energy efficiency of housing, including 10,000,000 euro for providing support for owners of multi-apartment residential houses to pay the price of land alienation by ending forced shared property in privatised multi-apartment houses, 4,400,000 euro for the continuation of the housing guarantee support programme and the support programme “Balsts”; 530,581 euro for the completion of the privatisation process of state residential houses. At the same time, the Ministry emphasised that, after investing EU funding, it would be necessary to provide independent and sufficiently large funding for the granting of long-term loans and capital discounts to real estate developers in order to promote the construction and provision of low-rent housing for households that cannot afford housing on market conditions, as well as the energy efficiency of housing and the transition to RES (for the renovation of multi-apartment houses and private houses).
Additional 2,704,234 euro will be necessary for the investment of innovation, science in the economy and human capital development in 2023, including 400,000 euro for promoting the development of the start-up industry and raising foreign investment in Latvia; 2,304, 234 euro for annual monitoring of Latvian universities and vocational education institutions and their graduates, as well as gathering of data on the economic activity of the population. Additional funding for the development of Latvian science and the development of international competitiveness within the framework of the sectoral research programme should also be provided in the coming years.
Additional 7,096,054 euro are required for data and study-based decision-making and for improving the business environment, including 2,420,000 euro for the development of integrated statistical data processing and management systems; 1,003,319 euro for the further development of a modern, secure and efficient partnership-enhancing data ecosystem; 1,345,177 euro for ensuring high quality and efficient market surveillance in the areas of digital markets, new technologies, ecodesign and energy efficiency, as well as protecting consumers’ collective interests; as well as 2,327,558 euro for the further development of the Construction Information System and the modernisation of services.