RIGA - The Economics Ministry has been tasked with collating information on differences in heating bills across local governments so that the state could consider additional support for residents for which the current price increase compensation mechanisms will be insufficient, Prime Minister Krisjanis Karins (New Unity) said at a press conference after a meeting with President Egils Levits today.
When asked about Latvia's borrowing opportunities to compensate the public for the increasing energy prices, Karins said that the economy was currently growing faster than anticipated and was projected to increase to about EUR 38 billion this year. If so, Latvia's external debt will be around or below 45 percent of gross domestic product, which would one of the lowest debts in the European Union, said Karins.
This means that, in theory, Latvia will be able to borrow more while maintaining good international ratings, said the prime minister.
However, the government always carefully assesses whether it is really necessary to borrow more, we have to "remember that every euro we borrow will have to be returned", said Karins. Budget revenue is higher than projected because of inflation, therefore there already are additional funds in the budget that could be used to partly compensate for the increase in energy prices for residents during the heating season.
Following the increase in energy prices caused by Russia's war in Ukraine, the government has already approved, and Saeima has endorsed, support for residents and companies in the amount of EUR 650 million, said Karins.
As an additional step, the prime minister has instructed the Economics Ministry to gather data from all municipalities as heating tariffs are expected to differ greatly, ranging from EUR 50 to EUR 300 per megawatt-hour (MWh).
In cases heating bills become unaffordable, even with state support, the state will consider increasing support for these residents, said Karins.
"This winter will not be easy for us, but we will get through it," he said.