RIGA, July 3 (Reuters) - Latvia, facing a GDP drop of 18 percent this year and needing foreign aid, had a state and social security budget gap of 456.18 million lats ($916.8 million) in the first half, the Finance Ministry said on Friday.
The figure was about 3.5 percent of forecast gross domestic product (GDP) of 12.9 billion lats this year, though it did not include the local authority budgets, which are added in when the European Union looks at countries' budget deficits.
Latvia, which had a state and social security budget surplus of 79.6 million lats in the first half of 2008, has just won approval from the European Commission for a loan tranche of 1.2 billion euros to help fund the budget gap.
It was part of a 7.5 billion euro loan package agreed with the EU and International Monetary Fund (IMF) last year.
The budget deficit by the end of the year is expected to top 10 percent of GDP. The Commission has said Latvia should reduce its funding gap to within 3 percent of GDP by 2012 as it seeks to eventually adopt the euro.
(Reporting by Patrick Lannin; Editing by Ron Askew) Keywords: LATVIA BUDGET/ (Riga newsroom, patrick.lannin@reuters.com, patrick.lannin.reuters.com@reuters.net, +371 29 269 191) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The figure was about 3.5 percent of forecast gross domestic product (GDP) of 12.9 billion lats this year, though it did not include the local authority budgets, which are added in when the European Union looks at countries' budget deficits.
Latvia, which had a state and social security budget surplus of 79.6 million lats in the first half of 2008, has just won approval from the European Commission for a loan tranche of 1.2 billion euros to help fund the budget gap.
It was part of a 7.5 billion euro loan package agreed with the EU and International Monetary Fund (IMF) last year.
The budget deficit by the end of the year is expected to top 10 percent of GDP. The Commission has said Latvia should reduce its funding gap to within 3 percent of GDP by 2012 as it seeks to eventually adopt the euro.
(Reporting by Patrick Lannin; Editing by Ron Askew) Keywords: LATVIA BUDGET/ (Riga newsroom, patrick.lannin@reuters.com, patrick.lannin.reuters.com@reuters.net, +371 29 269 191) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.