Saeima approved the law on 2023 consolidated budget and medium-term budget framework for 2023, 2024 and 2025 on 9 March 2023. According to the Law, in 2023 defence expenditure will reach EUR 986.83 million or 2.25% of Latvia’s gross domestic product, bringing defence spending up by EUR 163.55 million compared to 2022. Annual defence budget will also continue to grow in the medium term, reaching 2.4% of GDP in 2024 and 2.5% of GDP in 2025.
In 2023 the main national defence capability development expenditure priorities of the Defence Ministry will be:
• Development of National Armed Force combat capabilities, including fostering acquisition of medium-range air defence capabilities, coastal defence and long-range rocket artillery systems.
• Comprehensive implementation of state defence service across Latvia.
• Development of military infrastructure and comprehensive national defence framework.
The main lines of 2023 defence budget are personnel (38%), maintenance (31%) and investments (31%), with EUR 370 million in personnel costs and EUR 309.21 million in maintenance costs. EUR 303.62 million will be invested in upgrading of various capabilities and infrastructure elements. To strengthen air defence capabilities of the National Armed Forces, Latvia plans to invest an average of EUR 200 million annually between 2023 and 2025.