The proximity of the Russian border, the decisions of the European Central Bank (ECB) on rate hikes and other factors have recently significantly increased Latvia’s cost of debt.
Currently, the state spends around € 200 million annually on interest payments on borrowed money. Although Latvia’s national debt is not too high compared to other countries, over the next four years, loans will be refinanced for an average amount of € 1.7 billion per year. In the current situation, this will most likely create additional expenses and increase the burden on the state budget.
How big is Latvia’s per capita public debt right now, how much we will have to repay in the coming years and how much we plan to borrow, why investors consider funding for Latvia as risky as it is for Italy and what we can expect in the future, explains the portal “Delphi Bizness”.
