Macroeconomic Forecast Latvia

The country's gross external debt reached EUR20.35 billion in March. The banking sector accounted for about 69% of total debt and associated financing risks are mitigated by the debt structure, with two-thirds of bank debt in the form of loans, largely from foreign parents who are unlikely to walk away at a time of stress. Around 26% of bank external debt is in the form of non-resident deposits, which historically have tended to be stable. The foreign debt of the general government and central bank is very low, at less than 5% of total external debt (or 5.6% of

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