Latvia's 2026 State Budget Law Promulgated with Key Amendments and EU Funding Allocations

Latvia's President Edgars Rinkevics has promulgated the 2026 State Budget Law, following its adoption by the Saeima on December 4. The budget includes projected revenues of EUR 16.1 billion, expenditures of EUR 17.9 billion, and a deficit of 3.3% of GDP.

Significant amendments include an increase in childcare allowance and a reduced VAT rate of 12% on certain basic food products starting July 1, 2026. The Finance Ministry announced planned investments exceeding EUR 1 billion from EU funds, focusing on national security, family support, and education. Additionally, the European Commission approved amendments to the 2021-2027 EU funds program, allowing EUR 470 million to be allocated for security and defense needs, with project deadlines extended to 2030.