Translated using ChatGPT service.
The Ministry of Economics' (ME) budget for 2025 is €198,776,018, with the majority of the funding – €119,774,227 – allocated to various support measures aimed at boosting business competitiveness. This includes attracting high-value-added investments, supporting innovation, and enhancing the export capacity of companies, including support for the tourism sector.
A fundamental prerequisite for Latvia's development is building economic competitiveness based on technological factors, production efficiency, innovation, and the ability to adapt to and leverage opportunities arising from global changes. In 2025, ME has planned significant investments in the economy, which, combined with EU funds, will provide substantial support to businesses for productivity, digitalization, export capacity, competitiveness, and energy efficiency improvements. These efforts, in turn, will drive the growth of Latvia's economy and the increase in export volumes.
In addition to EU support programs, the 2025 state budget of ME includes €10 million for innovation development. Of this, €8 million is planned for the continuation of the long-term research program of the Innovation Fund, and €2 million is allocated for the creation of a new Innovation Investment Fund under Altum to support companies in implementing innovative ideas in various areas of smart specialization. Startups are also key players in innovation development, so next year, we will continue to support non-governmental organizations within the startup ecosystem for organizing international-level events and providing consultations. For this purpose, €400,000 is allocated in the 2025 state budget.
Continuing the support for large investment projects, next year the Altum support program for loans with capital discounts worth €30 million will continue. This program is available to entrepreneurs planning to make investments of at least €10 million in business growth.
Export capacity is one of the main drivers of economic development. Therefore, in the 2025 state budget, we have allocated €6 million for various export promotion and investment attraction activities. Additionally, €1.12 million is provided to the Investment and Development Agency of Latvia (LIAA) for organizing high-level business delegations abroad with industry representatives, and €675,860 is allocated to improve and expedite the services for foreign investors and exporting companies, as well as to foster the growth of foreign investments. This will serve as an additional motivation tool for LIAA employees, ensuring bonuses for those working in export promotion and investment attraction, whose results are directly measurable by the attracted investments in the given year.
Housing availability, especially in the regions, is a significant issue for economic growth. Thus, an additional €3.5 million will be directed to the construction of low-rent housing in the regions, which will allow for the construction of an additional 33 apartments. In addition to the Recovery Fund's support program for improving the energy efficiency of multi-apartment buildings and the so-called Renovation Fund program, €1.5 million is planned for 10 pilot projects to insulate multi-apartment buildings using prefabricated wooden frame panels. This will also boost the local building materials production sector and create best-practice examples for the renovation of multi-apartment buildings.
To expand housing crediting opportunities in the regions, we plan to establish a new Altum loan support program worth €3.5 million. The program is currently in the conceptual stage and will need to be approved by the European Commission. Next year, we will also continue the implementation of the housing guarantee programs and the “Support” program. No additional state budget funding is required for these programs, as Altum’s funds from loan repayments will be used. So far, more than 29,000 families with children, 6,390 young professionals, and 311 National Armed Forces soldiers have acquired housing with the help of Altum guarantees. The total amount of Altum guarantees granted exceeds €300 million. Meanwhile, more than 1,700 families have received “Support” subsidies for home purchases, with a total amount of €14.8 million.
To improve housing availability and compensate for high energy resource prices, significant state funding will continue to be allocated to cover electricity costs for protected users. In the 2025 state budget, €23.8 million is earmarked for this purpose. Protected electricity users include low-income or disadvantaged households, families caring for a child with a disability, people with a Group I disability or their guardians, and large families.
To promote the well-being of residents and enhance business competitiveness, tax reforms approved by the government will also be essential for Latvia's economic growth. The most significant measure in the budget-related legislative package is labor tax reform, which will increase wages for 95% of taxpayers. Additionally, the micro-enterprise tax regime will be simplified, making it more accessible for small business owners who operate irregularly.
