Next year Latvia will need to borrow 3.8 billion euros on international financial markets, and in 2027 the borrowing requirement will rise to 4.3 billion euros, Deputy State Treasury Manager Jānis Rozenbergs told the Saeima’s Budget and Finance (Taxation) Committee on Wednesday.
He explained that around 2 billion euros each year is allocated to repaying earlier debt, while the remaining funds cover the state budget deficit and provide a cash reserve at the Treasury for unforeseen needs.
Rozenbergs noted that debt servicing costs are increasing. For about seven years Latvia could borrow at nearly 0% interest, but now new loans already exceed 3%. Even if the budget were balanced, debt service costs would rise due to higher rates, he stressed.
At the same time, Rozenbergs underlined that Latvia’s most recent borrowing was at more favorable terms than Lithuania’s, even though Lithuania has a slightly higher credit rating and overall stronger economic indicators.
The Budget Committee and the Treasury agreed to review Latvia’s debt and servicing costs in greater detail
at a closed meeting in November.
On the 25th of September, the Treasury issued 10-year eurobonds worth 1.25 billion euros at a yield of 3.583% and a coupon of 3.5%. Around 70 investors from various European countries, including the UK, Germany, Spain, and the Benelux states, purchased Latvian government securities. Demand for the issue exceeded 2.5 billion euros.
The Treasury has already fulfilled 90% of this year’s 3.6 billion euros borrowing plan, mainly used for debt repayment and financing the budget deficit. Total debt repayments in 2025 amount to 2.127 billion euros, of which 1.795 billion euros has already been settled, including redemption of 1.11 billion euros in 10-year eurobonds issued in 2015.
Latvia’s government debt is projected to reach 20.5 billion euros, or 49% of GDP, by the end of 2025 — still among the lowest in the eurozone and the EU.
The previous borrowing was in May 2025, when Latvia issued five-year eurobonds worth 1 billion euros at a yield of 2.971% and a coupon of 2.875%, with maturity in May 2030.
Read also: Ašeradens considers Latvia’s 2026 state budget “very, very good”