At the end of May, the nominal value of Latvian state debt was EUR 13.4 billion, up by EUR 909 million or by 7.3% from the end of 2020, according to information from the Ministry of Finance.
The ministry explained that the increase of the state debt was dictated by the issue of ten-year euro bonds worth EUR 1.25 billion on international financial markets on March 10 and the additional issue of euro bonds worth EUR 227.25 million on the domestic financial market.
“Borrowing was done to secure resources to finance the budget deficit, support activities to reduce Covid-19 consequences and service the public debt,” explains the Ministry of Finance.
At the same time, in January redemption of EUR 1 billion in Eurobonds issued on international financial markets was performed, followed by redemption of ten-year bonds worth EUR 87.1 million on the domestic market in February.
According to estimates from the State Treasury, the general state debt in Latvia will reach 48.9% of GDP this year and 50.3% of GDP next year.
The Ministry of Finance reminded that on May 14 the international credit rating agency Moody’s affirmed Latvia’s credit rating at A3 with a stable future outlook.
“Moody’s justified maintaining the credit rating at A3 with the relative resistance of Latvia’s economy to the shocks caused by the Covid-19 pandemic and the economy’s growth potential,” notes the ministry. (BNN/Business World Magazine)
