The Ministry of Economics (MoE) budget for 2025 amounts to EUR 198 776 018, of which the largest share of the funding – EUR 119 774 227 – is earmarked for various support measures to boost business competitiveness: attracting high value-added investment, supporting innovation, and promoting companies' export capacity, including support for the tourism sector.
A fundamental precondition for Latvia's development is to base the competitive advantages of its economy on technological factors, production efficiency and innovation, as well as on the ability to adapt to and make use of the opportunities created by global change. For 2025 the MoE has provided for significant investment in the national economy within the state budget which, together with EU investment, will give businesses substantial support in raising productivity, digitalisation, export capacity, competitiveness and energy efficiency, which in turn will ensure growth in Latvia's economy and an increase in the volume of exports.
In addition to the EU support programmes, the MoE has earmarked EUR 10 million in the 2025 state budget for the development of innovation – EUR 8 million is planned for 2025 to continue the existing Innovation Fund long-term research programme, while EUR 2 million is set aside for the creation of a new Innovation Investment Fund at Altum to support companies in implementing innovative ideas across various smart specialisation areas. Start-ups are also important players in the development of innovation, and so next year we will continue to support the non-governmental organisations of the start-up ecosystem in organising international-level events and providing consultations; EUR 400 thousand has been allocated for this purpose in the 2025 state budget.
Continuing to support the implementation of large investment projects, next year Altum will carry on its support programme of loans with a capital rebate worth EUR 30 million for businesses planning to invest at least EUR 10 million in the growth of their company.
Export capacity is one of the main drivers of economic development. That is why, in the 2025 state budget, we have found the means to allocate EUR 6 million to various activities promoting the export of goods and services and attracting investment. In addition, EUR 1.12 million is earmarked for the Investment and Development Agency of Latvia to organise high-level business delegation visits abroad with representation from companies in the sector, and EUR 675 860 is set aside for better and faster services for foreign investors and exporting businesses, as well as for promoting growth in foreign investment. This will be an additional motivational instrument for LIAA staff, providing performance-related bonuses for employees working in export promotion and investment attraction whose results can be identified with the investment attracted in a given year.
Housing availability is essential to fostering economic growth, particularly in the regions. Accordingly, an additional EUR 3.5 million will be directed to the construction of low-rent housing in the regions, which will make it possible to fund the construction of a further 33 flats. In addition to the Recovery Fund support programme for improving the energy efficiency of apartment buildings and the so-called Renovation Fund programme, EUR 1.5 million is planned for 2025 for 10 pilot projects insulating apartment buildings with industrially manufactured timber frame panels, which will at the same time develop the local building materials manufacturing sector and create examples of good practice for the renovation of apartment buildings.
To broaden housing lending opportunities in the regions, we intend to establish a new Altum loan support programme worth EUR 3.5 million. The support programme is still at the idea stage and will need to be agreed with the European Commission. Next year we will also continue to implement the housing guarantee programmes and the “Balsts” programme. No additional state budget funding is required to run these programmes, as Altum funding from loan repayments will be used for this purpose. To date, more than 29 thousand families with children, 6390 young specialists and 311 National Armed Forces soldiers have purchased a home with the help of an Altum guarantee under these programmes. The total value of the guarantees issued by Altum exceeds EUR 300 million. Meanwhile, more than 1700 families have received the “Balsts” subsidy for purchasing a home, for a total of EUR 14.8 million.
To promote housing availability and to offset high energy prices, significant state funding will continue to be allocated to covering electricity costs for protected users – EUR 23.8 million is earmarked for this purpose in the 2025 state budget. Protected electricity users are low-income or needy households, families caring for a child with a disability, people with a Group I disability or their guardian, and large families.
In fostering people's welfare and business competitiveness, the changes to the tax reform approved by the government will also be important for the growth of Latvia's economy. The most significant item in the package of draft laws accompanying the budget is the labour tax reform, which will increase the pay of 95% of taxpayers. The micro-enterprise tax regime will likewise be simplified, making it more accessible to small businesses that carry out economic activity on an irregular basis.