Latvia may fail to repay foreign debts

  • 1998-08-06
RIGA (BNS) - The Latvian State Treasury forecasts that the country may fail to return 33.9 million lats in foreign credits by 2012.

The sum to be repaid is expected to exceed 97 million lats.

The state budget has not returned foreign loans that have remained unpaid by their recipients, according to State Treasury Risk Management Department's head Kaspars Abolins.

By June 30, the state had distributed more than 100 million lats in foreign loans. About 70 percent of the credits are expected to be returned in time.

"It does not mean that the remaining 30 percent will not be returned altogether. Some will be collected through courts by liquidation of enterprises or otherwise," Abolins said.

To avoid taking resources from state coffers, provisions are being made for foreign loans, he noted.

The State Treasury predicts that the least problems will be connected with repaying loans of the Japanese Import and Export Bank, the European Bank for Reconstruction and Development and the World Bank.

The World Bank is Latvia's largest creditor and the resources are primarily used to finance investment projects.

More problematic could be the repayment of loans extended by G-24 and the International Monetary Fund, but these sums are comparatively small.

The most hopeless credits of G-24 are now serviced by Parekss Banka and Baltijas Tranzitu Banka, which have succeeded in recovering some debts.

The total foreign debt of the country was 227 million lats in the second quarter of this year.

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