Macroeconomic Developments Report, June 2017

2017
JUNE
MACROECONOMIC
DEVELOPMENTS
REPORT

MACROECONOMIC DEVELOPMENTS REPORT
June 2017
June 2017, No 25
© Latvijas Banka, 2017
The source is to be indicated when reproduced.
Latvijas Banka
K. Valdemāra iela 2A, Riga, LV-1050, Latvia
Tel.: +371 67022300 Fax: +371 67022420
http://www.bank.lv
info@bank.lv

2
June 2017
CONTENTS
Contents
Abbreviations 3
Introduction 4
1. External Demand 5
2. Financial Conditions 7
2.1 ECB policy 7
Box 1. Shadow rate 8
2.2 Other central bank decisions and financial markets 9
2.3 Securities market 11
2.4 Interest rates 13
2.5 Credits and deposits 15
Box 2. Euro area bank lending survey results for Latvia 17
2.6 Cross-border financial flows in the balance of payments 193. Sector Development
21
3.1 Manufacturing 21
3.2 Agriculture 23
3.3 Construction 24
3.4 Real estate market 25
3.5 Trade 26
3.6 Transport 27
3.7 Gross domestic product 28
4. GDPAnalysis from the Demand Side 30
4.1 Private consumption 31
4.2 Investment 31
4.3 Exports 33
4.4 Imports 33
4.5 Government consumption 34
5. Labour Market 35
6. Costs and Prices 37
7. Conclusions and Forecasts 40
8. Analysis of Scenarios 42
Statistics 47
Additional Information 99

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June 2017
Abbreviations
APP – asset purchase programme
CIS – Commonwealth of Independent States
CSB – Central Statistical Bureau of Latvia
EC – European Commission
ECB – European Central Bank
EONIA – euro overnight index average
ESA 2010 – European System of Accounts 2010
EU – European Union
EU28 – 28 countries of the EU
EURIBOR – Euro Interbank Offered Rate
Eurostat – statistical office of the European Union
FAO – Food and Agriculture Organization of the United Nations
FRS – US Federal Reserve System
GDP – gross domestic product
GFCF – gross fixed capital formation
HICP – Harmonised Index of Consumer Prices
JSC – joint stock company
Ltd. – limited liability company
MFI – monetary financial institution
OPEC – Organization of Petroleum Exporting Countries
PIT – personal income tax
PJSC – public joint stock company
PMI – Purchasing Managers' Index
PUC – Public Utilities Commission
SJSC – state joint stock company
SRS – State Revenue Service
TLTRO – targeted longer-term refinancing operations
UK – United Kingdom
UN – United Nations
US – United States of America
VAT – value added tax
WTO – World Trade Organization
ABBREVIATIONS

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June 2017
Introduction
In the course of the last six months, Latvijas Banka's assessment of economic development
in Latvia has become more optimistic due to external demand becoming stronger and
investment activity recovering gradually. At the end of 2016 and in early 2017, economic
growth in Latvia accelerated, and the leading indicators of both global environment and
major trade partners corroborate sustainability of improvements in the external economic
environment also in the future. Meanwhile, financing conditions are favourable for lending,
and the labour market shows signs of further improvement. More positive effects from the
EU funding cycle for the economy are expected in the course of the year, with the domestic
demand gaining momentum and GDP growing, in construction and related sectors in
particular.
Hikes in energy and food prices observed in world markets at the end of 2016 and in early
2017 triggered higher inflation rates. At the current juncture, the influence of external factors
has become stable, while domestically strengthening economic activity and wage increases
gradually provide a more positive domestic demand effect on inflation.
Amidst wages growing faster than productivity and with the share of remuneration in value
added approaching the EU average, the gains in Latvian export market shares point to
resilience in competitiveness. Investment recovery is a basis for productivity growth, and
already in the first quarter of 2017, the private sector investment project launching activity
became brisker, public investment recovery was gaining momentum, and foreign direct
investment inflows remained robust. Nevertheless, the course of domestic structural reform
process and the development and stability of a competitiveness-enhancing tax system have
not lost their significance for strengthening the long-term potential of the economy.
INTRODUCTION

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June 2017
1. EXTERNAL DEMAND
1. External Demand1
Previous assessment Developments since the previous report New assessment1
External demand
Moderate growth, albeit
somewhat slower than
previously expected due
to weaker demand from
Lithuania, Sweden and
Poland
– Increase/strengthening of global commodity
(oil including) prices in the first quarter;
– recovery of world trade;
– acceleration of euro area economic growth
and improving confidence;
– upward revision of external demand forecast
for Latvia.
Moderate yet slightly
faster-than-expected
growth related to improved
outlook across the euro
area and for Latvia's major
trade partners.
The global economic environment is posting an overall improvement. Global financial
conditions remain favourable, and economic growth is gaining momentum in an ever-
increasing number of world countries. In the US, expectations of growth-enhancing fiscal
policy have softened; following the FRS's raising of the federal funds target rate in March,
market participants are anticipating tighter monetary conditions to be introduced in a more
gradual way. However, the conditions for US economic development remain favourable,
including almost full employment in the labour market and wage growth. Meanwhile, other
major central banks proceeded with accommodative monetary policy. The recovery of global
trade flows is underway and is driven by growing global demand, including for investment,
and rising commodity prices. Business confidence surveys (global PMI of new export
orders) suggest that global trade will be growing likewise resiliently also in the future. Oil
and other commodity price rises at the turn of the year triggered the recovery of demand
in commodity-exporting developing countries. Via trade and confidence channels, this
acceleration in their recovery is positively affected also by economic advance and improved
confidence of market participants across developed countries as well as by more dynamic
progress in and better outlook for the economy of China.
For most countries, the oil price rise has been the decisive underpinning factor of a higher
inflation rate, yet substantial pressures from oil prices are not to be expected, as oil and food
prices have stabilised and the effect of demand on inflation continues to be weak. Despite
inflation elevation in the euro area because of higher energy prices, core inflation remains
very low due to delayed wage increases and a weak pressure from domestic prices.
In the euro area, economic recovery is gaining momentum, basically driven by stronger
domestic demand. Improvements in external environment have simultaneously translated
into export expansion. Private consumption is facilitated by retained employment growth
and improving consumer confidence. However, the labour market improvements have not
been sufficient to speed up the wage growth as an effect of economic recovery; in addition,
the augmenting of household real incomes was held back by hiking energy prices. Monetary
policy continues to support the rebirth of investment and is expected, coupled with improved
company profitability, to further spur it. The outlook for euro area GDP growth for 2017 has
been revised slightly upwards by international institutions.
The 2017 GDP growth outlook for Latvia's major trade partners has improved as well. It is
determined by better-than-previously-projected economic performance and the dynamics
of several leading indicators from future changes predicting surveys (e.g. EC compiled
economic sentiment indicator and PMI). As stronger growth has given impetus to global
1
Colours in tables are used to show differences in the assessment of impact on Latvia's GDP and inflation vis-à-vis the
previous forecast.
Worsened Unchanged Improved

6
June 2017
foreign trade, the forecast of external demand in 2017 for Latvia has undergone a quite
substantial upward revision.
Similar to Latvia, latest macroeconomic indicators recorded by Lithuania and Estonia
are better than projected. The expansion of external trade accompanied with increasing
public expenditure are the drivers of growth in both Lithuania and Estonia. Additionally,
the financing from EU structural funds became available again in 2017. Nevertheless,
the perspective for Latvian exports related to stronger external economic activity may be
partly limited by the effect of demand structure, for, mostly resulting from a more buoyant
investment activity, the demand is likely to grow for imported capital goods.
Stabilisation of oil prices has brought about a better economic perspective for Russia. Its
economy is expected to come out of the two-year long recession in 2017. The declining
inflation and stable exchange rate both support the revival of private consumption growth,
which is expected to be followed by a somewhat stronger investment activity. A more
dynamic economic development, however, is likely to be restricted by still heightened
uncertainty and weakness of structural growth factors. Direct dependence of Latvia's
economy on Russia has diminished, while the latter's indirect impact via other economies of
the region remains rather strong.
The economic perspective has improved also for Germany. In 2017, its economic
development is likely to be spurred by private consumption because further labour market
improvements. The investment activity is likewise expected to be high, partly due to the
immigration policy providing for public financing for social housing. Brisker investment
and building activities are good news for Latvian exporters, primarily for manufacturers of
building materials (e.g. wood and metal structures) and other products.
The forecasts for growth in Sweden continue to be good. It will still be supported by the
resilient private consumption as well as previously buoyantly strengthening investment
and thereby also construction activity. The Latvian building companies and their associates
manage to take advantage of the active residential stock construction in Sweden.
The UK still experiences heightened uncertainty, resulting from the Brexit process and
amplified by the outcome of the latest general election. This uncertainty is also mirrored
by economic indicators, which show falling growth rates. Under the impact of depreciating
British pound sterling import prices elevated, thereby also causing consumer price inflation
to increase at the rate which exceeded the rate of wage growth. As a result, a fall in private
consumption has occurred for the first time since 2013. PMI of the UK construction sector,
which is significant for Latvia, suggests that the relatively sluggish first quarter growth will
be followed by revived activity, and it gives rise to hopes that Latvia's exports of wood to
the UK will manage to recover, at least in part, after the year-on-year fall experienced in the
first four months of 2017.
1. EXTERNAL DEMAND

7
June 2017
2. Financial Conditions
2.1 ECB policy
Previous assessment Developments since the previous
report
New assessment
ECB decisions
Market expectations
are in line with the
decision by the
Governing Council
of the ECB to
maintain the key
ECB interest rates at
the current level and
to continue with the
implementation of the
expanded APP at least
until the end of March
2017.
– Economic growth fundamentals
and monetary aggregates continue to
improve;
– at its June meeting, the Governing
Council of the ECB expresses the
view that the risks to the euro area
growth outlook are balanced;
– at its June meeting, the Governing
Council of the ECB decides to drop
the reference to further key ECB
interest rate cuts from its forward
guidance.
Market expectations are in line with the
decision by the Governing Council of the
ECB to maintain the key ECB interest
rates at the current level and to continue
with the implementation of the expanded
APP at least until the end of 2017; raising
of the interest rates is expected in the
second or third quarter of 2018.
Market participants expect that the
forward guidance of the Governing
Council of the ECB will be changed in
September 2017 with respect to tapering
the expanded APP.
ECB continued to provide highly accommodative monetary policy conditions. In line with
the previous decisions, purchases within the framework of the expanded APP continued in
April at a monthly pace of 60 billion euro. At the same time, the practice of reinvesting the
principals from maturing securities purchased under the expanded APP was continued. The
final TLTRO II tender was conducted in March, with the allotment totalling 233.5 billion
euro. Some banks exercised the early repayment option for the amounts borrowed at TLTRO
I tenders. Currently, the total amount outstanding within the framework of both TLTRO I
and TLTRO II is 761.9 billion euro.
At its January, March, April and June meetings, the Governing Council of the ECB decided to
keep the key ECB interest rates and the non-standard monetary policy measures unchanged.
At its April meeting, the Governing Council of the ECB admitted that "the cyclical recovery
of the euro area economy is becoming increasingly solid and that downside risks have further
diminished". At the June meeting, the assessment of risk was raised even further and at the
moment the Governing Council of the ECB considers the risks surrounding the euro area
growth outlook to be broadly balanced. At its June meeting, the Governing Council also
decided to introduce a change to its forward guidance and drop the reference to further key
ECB interest rate cuts from it. Currently, the Governing Council of the ECB expects the key
ECB interest rates "to remain at their present levels for an extended period of time, and well
past the horizon of the net asset purchases". There was no change in the forward guidance as
concerns the expanded APP: it is intended that the monthly pace will remain the same until
the end of 2017, or beyond, if necessary, and in any case until the Governing Council sees a
sustained adjustment in the path of inflation consistent with its inflation aim.
At the press conference of January 2017, Mario Draghi, President of the ECB, provided a
more detailed explanation as to what is considered to be an appropriate level of inflation by
naming four features characterising the compliance of the euro area inflation with the ECB's
inflation target. First of all, it is inflation in the medium-term; second, it has to be a durable
convergence (it cannot be transient); third, it has to be self-sustained, i.e. it has to stay on
target even in the absence of the ECB's extraordinary monetary policy support; fourth,
inflation has to be defined for the euro area as a whole.
In the most recent months, with the inflation rising and other economic growth fundamentals
improving, market participants started to expect tapering of the expanded APP purchases.
2. FINANCIAL CONDITIONS

8
June 2017
The latest surveys show that most market participants anticipate that the ECB will start
progressively reducing the monthly purchases of securities under the expanded APP as of
the first quarter of 2018 and that it will take six months to fully wind down the expanded
APP purchases. Survey results as well as the probability implied by the euro overnight index
swaps suggest that the ECB could raise the deposit facility rate as early as in the second
half of 2018. The implied forward yield curve steepened slightly in May as compared to
December 2016, suggesting that the market participants expect somewhat more notable
raising of the target rate.
Box 1. Shadow rate
The current economic situation can be characterised as an era of low interest rates. After
several years of monetary accommodation, the ECB has hit the zero lower bound mark. The
main refinancing rates have been cut to levels close to zero and even lower. Traditionally,
when explaining the monetary policies pursued by central banks and estimating the degree
to which central banks need to reduce or increase the nominal interest rates to adjust to
changes in inflation and other economic conditions in order to foster price stability and full
employment, Taylor's rule1
is used. Yet in the circumstances of zero interest rates the main
refinancing rate of the central bank is not an adequate parameter to characterise the
monetary policy stance because unconventional monetary policy measures, like the
expanded APP and long-term lending operations, are used to enhance accommodation. To
characterise all the central bank's accommodative monetary policy measures, a new
indicator, the so-called shadow rate, can be employed.
The shadow rate is derived from the term-structure of risk-free interest rates by applying
mathematical models and can be used to estimate the future effect of the monetary policy on
various macroeconomic variables. The shadow rate is not directly observable but acts as a
measure of what the main refinancing rate of the central bank would be in the absence of a
zero lower bound for interest rates and if the central bank used only the main refinancing
operations instead of the non-standard monetary policy instruments.
1
Taylor, J. B. Discretion versus Policy Rules in Practice. Carnegie–Rochester Conference Series on Public Policy 39,
December 1993, pp. 195–214.

9
June 2017
The shadow rate estimated by Latvijas Banka (currently, –2.3%; see Chart 1.1) is derived
based on average euro overnight index swap (OIS) rates over the period of three months to
ten years. As overnight loans granted to major banks are mainly considered risk-free, OIS
can be used to estimate the long-term risk-free interest rates. In normal circumstances, the
shadow rate tracked the money market rates closely. With interest rates approaching zero
and the ECB employing the unconventional monetary policy instruments, the shadow rate
moved away from the money market rates. The first dive of the shadow rate below EONIA
happened in mid-2011 when the ECB announced the expansion of the Securities Markets
Programme and the next one in November 2011 following the ECB's announcement of the
start of longer-term refinancing operations. The shadow rate entered a negative territory for
the first time in April 2012 after Mario Draghi, the President of the ECB, announced:
"within our mandate, the ECB is ready to do whatever it takes to preserve the euro", thus
affecting the market expectations. Comparing the theoretical rate implied by Taylor's rule
and the shadow rate of the euro area, one can conclude that, since the end of 2013, the
shadow rate was able to follow the Taylor rule-implied rate into the negative territory
regardless of the non-standard monetary policy stimulus provided by the Eurosystem.
Moreover, it remained close to the upper bound of the Taylor rate's range. Following the
gradual recovery trend observed in the euro area economy, the range of the Taylor rule-
implied rate started to move upwards in 2015, whereas the shadow rate remained low,
pointing to the presence of significant monetary stimulus provided by the ECB.
2.2 Other central bank decisions and financial markets
Previous assessment Developments since the previous report New assessment
FRS decisions
Market participants
expect that the target
rate will be raised
at December 2016
and March 2017
meetings. At the
same time, market
participants expect more
significant increases
of the target rate in the
upcoming three-year
period.
– At its December meeting, the FRS raises the
target range for the federal funds rate from 0.25%–
0.50% to 0.50%–0.75% and then to 0.75%–1.00%
at its March meeting;
– FRS anticipates that a change in reinvestment
policy regarding maturing bonds would be
appropriate in the near future;
– the new US administration is slow on the
promised reforms, market participants lose faith
in the implementation of growth-supporting future
policies;
– US labour market indicators continue to improve,
economic activity strengthens, while the inflation
growth is lower than expected;
– longer-term bond yields are increasing.
Market participants
expect that the target
rate for federal funds
will be raised at June
2017 meeting. At the
same time, market
participants expect
flattening of the path
of the target rate for
federal funds as of
2018.
Bank of England's decisions
Market participants
anticipate that the
target rate will remain
at a lower level in the
upcoming three-year
period.
– The process of the United Kingdom's withdrawal
from the EU has commenced;
– UK Prime Minister Theresa May announces a
snap general election.
Market participants
anticipate that the Bank
of England's Bank Rate
will remain unchanged
at the level of 0.25%
at least until the end of
2017.

10
June 2017
Bank of Japan's decisions
Market participants
anticipate that the target
rate will remain low in
the upcoming three-year
period.
– Bank of Japan raises the GDP forecast and adjusts
downwards the inflation forecast;
– inflation and consumer expectations concerning
the level of future prices decrease.
Market participants
anticipate that the target
rate will remain low in
the upcoming three-
year period.
EUR/USD exchange rate
Market participants
anticipate that the euro
will depreciate against
the USD (to 1.04 USD
per euro) in a year.
– Political risks in the euro area subside;
– market participants lose faith in fast
implementation of growth-supporting policies in
the USA.
Market participants
anticipate that the euro
exchange rate against
the USD will be 1.10
USD per euro in a year.
Financial market sentiment was positive at the beginning of 2017. Stock price volatility was
low and overall the prices somewhat increased. Central bank policies continued to influence
the financial market developments. Investors kept a close watch on the first instructions
given by the new US President Donald Trump to see whether they fulfil the promises made
in the run up to the elections. In the euro area financial markets, investors continued to
follow the unfolding of the Brexit scenario and the developments related to the upcoming
Presidential elections in France. With the Presidential elections in France approaching,
volatility increased in April and the prices of safe assets went up. The good polling results of
Marine Le Pen caused jitters on the financial markets because of her anti-European political
beliefs and the resultant prospects of France potentially leaving the EU. Once the centrist
and pro-European candidate Emmanuel Macron took over the lead at polls, particularly after
the first round, and subsequently gained the voters' support at the second round, the political
risks in the euro area subsided and the financial market sentiment improved. In May, the euro
exchange rate vis-à-vis the US dollar reached the highest level of the last six months, the
prices of riskier assets increased, whereas those of the most safe bonds slightly decreased.
During the first four months of 2017, the euro exchange rate vis-à-vis the US dollar followed
a moderate upward trend which steepened in May when the political uncertainly in the euro
area declined and that in the USA heightened. In May 2017, the euro appreciated by 6.7% in
comparison with December 2016, with its exchange rate vis-à-vis the US dollar going from
1.05 USD per euro to 1.12 USD per euro. The market participants' expectations regarding
the euro exchange rate in the coming 12-months period have heightened since the November
assessment (to 1.10 USD per euro).

11
June 2017
With the investor optimism concerning the ability of the newly-elected US President to fulfil
his pre-election promises and implement business growth supporting policies fading, the
positive response of the financial market observed at the turn of 2016 turned flat. Failure
to go ahead with the promised health care reform made market participants question the
new-elected President's ability to keep his promises, thereby having a negative effect on the
market sentiment.
As already expected by the market participants, the Federal Reserve Board raised the target
rate for federal funds by 0.25 percentage point (to the target range of 0.75%–1.00%) at its
March meeting. At the same time, contrary to the market expectations, no announcement of
an intention to potentially raise the rate more substantially in the future was made. The slope
of the implied term structure curve of the federal funds rate flattened slightly as of 2018 after
several FRS participants revealed that reinvestment of maturing bonds could be discontinued
in the near future. This is a restrictive monetary policy step, implying that the future path of
the base rate of the central bank could be flatter in the future.
Despite the growing inflation, Bank of England continued with an accommodative monetary
policy as it was warranted by the weakening of the domestic demand and its forecasts.
Bank of England maintained its Bank Rate at the level of 0.25%, with the size of the
asset purchases also remaining unchanged at 435 billion British pound sterling. Market
expectations concerning the future actions of the Bank of England have also remained
unchanged and no raising of the Bank Rate is projected in the course of 2017. Moreover,
market participants anticipate the Bank of England's target interest rate to remain low in the
coming three years.
Bank of Japan continued with a particularly accommodative monetary policy and abstained
from any new decisions in the reporting period. It kept unchanged the short-term policy
interest rate at –0.1%, the target level of 10-year government bond yields at 0% and the
annual pace of increase of the monetary base at 80 trillion Japanese yen. At the same time,
Bank of Japan upgraded the outlook for economic growth from "moderate recovery" to
"moderate expansion". Quite naturally, the implied term structure curve of Bank of Japan's
policy rate remained constant since December 2016, suggesting that the market expects the
central bank to continue accomodative monetary policy.
2.3 Securities market
During the first five months of 2017, 2–10 year yields of euro area government bonds
increased. This was supported by the relatively robust economic growth observed in the
first quarter of the year offsetting the negative effect of the political uncertainties (Brexit,
Presidential elections in France). Moreover, the economic growth of the euro area outpaced
that of the USA. Starting from mid-April when the victory of Emmanuel Macron at the
Presidential elections in France became more certain, the political risks in the euro abated
and the spread between the 10-year French, Spanish and Italian government bond yields and
the same maturity German government bonds narrowed. Nevertheless, a rather considerable

12
June 2017
degree of uncertainty remains with regard to the upcoming Parliamentary elections in Italy
scheduled for May 2018. Moreover, the current polls are dominated by the populist Five Star
Movement (Movimento Cinque Stelle). Some euro area countries experienced a decline in
the government bond yields. For example, the 10-year Greek and Portuguese government
bond yields contracted as the decrease in the fiscal risks in those countries was more
substantial than the upward pressure on the yields caused by the economic growth.
The Eurosystem purchased public sector securities within the framework of the expanded
APP based on the capital key, at the same time demonstrating certain flexibility of the
programme. For example, April data revealed that the Eurosystem had slightly stepped
up the purchases of the French government securities, most likely with a view to easing
the tension ahead of the French Presidential elections. Consequently, in order to preserve
the capital key proportions and implement a market-neutral expanded APP, the purchases
of the French government securities made in some other months will have to be reduced
accordingly.
During the period of rising interest rates, auctions of Latvian government securities were
only organised on three occasions, offering 3-year and 5-year bonds. Meanwhile, Latvia
launched euro bonds with a 10-year and 30-year maturities on the international financial
markets on 9 February (both issues together totalling 650 million euro) in order to cover
most of the borrowing scheduled for 2017 as well as to benefit from the low interest rate
environment. 30-year euro bonds had the historically longest maturity, their yield was
2.33%, with the spread of 98 basis points above the mid-swap rate. At the same time,
an additional issue of 10-year bonds, maturing in October 2026, was launched, with the
yield set at 1.062%. The yield of the 10-year Latvian government bonds was the lowest in
comparison with other similar-rating countries.
Two different-maturity additional euro bond issues were launched by Latvia on the
international financial markets on 1 June for the total amount of 350 million euro, covering
the rest of the borrowing scheduled for 2017. The yield of the 10-year bonds was 0.95%
(with the spread of 23 basis points above the mid-swap rate), whereas that of the 20 year
bonds was 1.70% (with the spread of 35 basis points above the mid-swap rate).

13
June 2017
2.4 Interest rates
Interest rate on loans to non-financial corporations and households
A slight decrease due to
the decline in the euro
money market rates.
– Euro money market rates continued to
decrease;
– the pressure from competition motivated
some credit institutions to reduce the
margins;
– creditworthiness of businesses improved.
A slight decrease due to the
shrinking of the risk premium
priced into the lending rates
and persistently favourable
euro money market conditions.
Interest rate on household loans
A slight decrease due to
the decline in the euro
money market rates.
– Euro money market rates continued to
decrease;
–t he pressure from competition motivated
some credit institutions to reduce the
margins;
– creditworthiness of households
improved.
A slight decrease in the
interest rates of consumer
credit and other credit granted
to households due to the
shrinking of the priced-in
risk premium. Interest rates
on loans for house purchase
unchanged.
In the fourth quarter of 2016 as well as from January to April 2017, the lending margins
on new euro loans narrowed slightly in all major sectors of Latvia's credit market. A lower
risk premium was priced into the lending rates due to the tightening of competition among
Latvia's credit institutions and an improvement in the borrowers' creditworthiness supported
by the general economic development and that of particular sectors. A minor reduction of the
lending and deposit rates can be expected in the coming quarters as well.
The financing costs of Latvia's credit institutions have decreased further in comparison with
October 2016. Most deposits by households and non-financial corporations are demand
deposits and savings deposits with interest rates close to zero or negative. The interest rate
on demand deposits in euro continued to approach zero in the reporting period. Nevertheless,
households and non-financial corporations do not seem willing to increase their investments
in longer-term fixed-term deposits on Latvia's deposits market. Although some households
and non-financial corporations continue to make longer-term fixed-term deposits as well
as place deposits with smaller credit institutions offering higher interest rates, the share
of fixed-term deposits in euro in all deposits received from households and non-financial
corporations tends to shrink. Despite the rising interest rates, the growth of the proportion of
deposits made in the US dollar and other currencies subsided in the reporting period.
Lending rates continued to decrease slowly in Latvia's major lending segments, as a
significant part of the loans has a floating interest rate which is directly affected by the
further decline of the euro money market rates. Moreover, the margins on new euro loans
granted by Latvia's credit institutions also tend to decrease gradually. Interest rates on
outstanding household loans for house purchase and loans to non-financial corporations
remained slightly above 2%, whereas the rates applied to consumer credit and other credit to
households declined by 0.1 percentage point, reaching 11.7%.
As regards new euro loans, lower interest rates were applied on loans to non-financial
corporations, household loans for house purchase as well as consumer credit and other credit
to households in the reporting period. In all the above segments, the interest rates decreased
on account of a gradual narrowing of the margins supported by the tight competition among
the credit institutions.

14
June 2017
With the overall economic growth and that of particular sectors strengthening, the financial
soundness of non-financial corporations improved and they could qualify for cheaper loans.
The decrease in the interest rates on new small and medium-sized euro loans to non-financial
corporations observed since October 2016 was more substantial than that in the case of large
loans. Some significant Latvia's credit institutions narrowed their margins on loans to small
and medium-sized enterprises in the reporting period, as they had a positive outlook on
Latvia's economic growth prospects and those of individual sectors and were also struggling
to retain their positions in Latvia's credit market. Although the interest rates applied to new
euro loans to non-financial corporations in Latvia have been reduced, they remain higher
than in most of the other euro area countries.

15
June 2017
Interest rates on household loans for house purchase as well as those on consumer credit and
other credit decreased as, motivated by competition, credit institutions cut their margins, but
also because the risk associated with the granted loans was also lower. Non-interest charges
on household loans for house purchase and consumer credit remained broadly unchanged in
the reporting period.
2.5 Credits and deposits
Lending
A steady increase in the
total loan portfolio and
that of non-financial
corporations in 2017
(active absorption
of EU funds serving
as the major factor).
Recovery of the annual
growth rate of lending
to households already
in the second half of
2017, with government
continuing the support
programme for house
purchase for new
families.
– New loans to both non-financial
corporations and households have
expanded;
– the support programme for new house
purchase is ongoing;
– activity and prices in the real estate
market have augmented;
– more active absorption of EU funds has
started;
– JSC "Attīstības finanšu institūcija
Altum" together with credit institutions
offers credit guarantees for small and
medium-sized enterprises and a new
support programme aimed at granting
loans for renovation of residential
buildings.
A steady increase in the total
loan portfolio and that of
non-financial corporations will
continue in 2017 and 2018
(active absorption of EU funds,
growing capital of non-financial
corporations and their readiness
for investment serving as major
factors). Stabilisation of the
annual rate of change of lending
to households in the second
half of 2017, with government
continuing the support
programme for house purchase
for new families and with the
demand for consumer credits
rising.
At the end of 2016 and in early 2017, credit institutions continued a gradual acceleration of
lending to the economy, i.e. both the total domestic loan portfolio and loans to non-financial
institutions recorded an increase during five of the last seven months, while the shrinking
of the household loan portfolio decelerated. The annual growth rate of total domestic loans,
including loans to non-financial corporations and households, was in positive territory
(in April, 2.5% and 1.7% respectively). It was only the annual rate of change in loans to
households that approached zero every month, although it remained negative (–1.1% in
April).
Since the uptrend in loans to the non-bank financial sector decelerated, lending to non-
financial corporations played the central role in lending growth. The investment recovery
has started to contribute to the demand for loans despite the hindering effect of the slow
increase in access to EU structural funds which decelerates progress of construction
projects. Fight against the shadow economy, the Eurosystem's accommodative monetary
policy in a persistently low interest rate environment and the stable credit standards, which

16
June 2017
are slightly eased in certain cases, have a positive effect on lending. An entrepreneurship
programme of the JSC "Attīstības finanšu institūcija Altum" regarding credit guarantees for
small and medium-sized enterprises (150 million euro have been foreseen for this purpose
in 2017) and its household sector support programme for house purchase for new families
facilitate lending. A new support programme aimed at granting loans for renovation of
residential buildings has been launched in 2017. Lending to households is also fostered by
the increasing demand for consumer credit supported by favourable consumer confidence
dynamics in the first four months of 2017. The growing activity in the real estate market
generates a positive environment in long-term lending.
An increase in new loans mirrors these trends. During the seven months from October
2016 to April 2017, new loans to non-financial corporations exceeded the indicators of the
respective period of 2015 and 2016 by 13.5%, loans to households for house purchase – by
18.1% and consumer credit – by 18.2%. The annual rate of change in new domestic loans
reached 15.6% in the above period.
It was primarily the expansion of domestic deposits that provided funding for the moderate
growth in loans. This growth was close to the economic growth rate, and in April it exceeded
the level of the respective period of the previous year by 4.0%. The annual growth rate of
deposits received from non-financial corporations and households was steeper (4.7% and
8.8% respectively), continuing to point to a slower increase in consumption in favour of a

17
June 2017
rise in deposits. The change in the policy concerning the allocation of financial institutions'
savings hindered the expansion of total deposits until March, resulting in the reduction of
deposits in domestic credit institutions.
For quite some time now, monetary data suggest that cooperation between the real economy
sector and credit institutions has been successful, i.e. with economic indicators moderately
improving, non-financial corporations (and also households) steadily increase their deposits
with credit institutions which, in turn, stimulate lending to businesses, thus providing a
common contribution to economic development. Dynamics of both the loan portfolio and
new loans demonstrate that the trend of moderate growth in lending to businesses will
continue, and the second half of the year might also see a minor increase in the household
lending portfolio. Nevertheless, the positive changes in the household loan portfolio
witnessed by the household sector will be slowed down by the high level of repayment of
long-term loans granted during the pre-crisis period. The euro area bank lending survey of
March 2017 suggests that the situation in the credit market was stable in the first quarter of
2017, and it is projected that credit standards will remain unchanged in the second quarter.
Meanwhile, the demand for loans by individual non-financial corporation segments has
increased, and it is expected to pick up in the second quarter. Moreover, several credit
institutions project a rise in the demand for household loans in the second quarter. With
lending to non-financial corporations recovering somewhat stronger than expected, there are
grounds for improving forecast in lending to non-financial corporations, while the forecast
in lending to households remains broadly unchanged, i.e. the annual rate of change will
stabilise in the second half of 2017.
Box 2. Euro area bank lending survey results for Latvia
Effect of ECB non-standard monetary policy instruments
The results of the euro area bank lending survey suggest that the negative ECB deposit
facility rate has the greatest impact on Latvian banks. In the second half of 2016, the
negative ECB deposit facility rate contributed to a decrease in the interest rate on loans to
non-financial corporations and households for house purchase in two of the four surveyed
Latvian banks and in one bank – on consumer credit and other lending to households. One
bank reported that the downward trend of interest rates associated with the negative ECB
deposit facility rate triggered an increase in the segment of new loans to households for
house purchase. Meanwhile, a half of the surveyed Latvian banks mentioned a negative
aspect, i.e. their net income edged down in the second half of 2016 due to negative deposit
facility rates.
In response to questions concerning the participation in TLTROs, Latvian banks pointed out
that the main reason why they were tempted to participate in the TLTROs is the attractive
terms enabling them to improve their profitability. By contrast, the main reasons keeping
Latvian banks from participation in the TLTROs are the restrictions on collateral and the
lack of limitations on funding as well as sufficient liquidity. In the fourth quarter of 2016,
Latvian banks used the funds obtained through the TLTROs for substituting the resources

18
June 2017
drawn from other Eurosystem's liquidity providing operations (mainly funding received
within TLTRO I) and interbank loans. One Latvian bank has slightly improved its liquidity
position through participation in the TLTROs.
Credit standards, terms and conditions and demand
Currently all surveyed Latvian banks have tighter credit standards than those witnessed, on
average, since the first quarter of 2003, but they are less tight than those prevailing, on
average, since the second quarter of 2010. A trend of slow easing of credit standards is
present in the segment of lending to households. In the fourth quarter of 2016 and the first
quarter of 2017, i.e. for two consecutive quarters, one Latvian bank slightly eased its credit
standards for loans to households for house purchase as well as for consumer credit and
other lending to households. Competition among banks played the key role in the slight
easing of credit standards in both sectors of lending to households. In addition, credit
standards for consumer credit and other lending to households were eased also because of
the growing non-bank competition and rising credit institutions' risk tolerance limits. It is
expected that the standards in this lending sector might be slightly eased also in the second
quarter. Latvian banks did not change credit standards for loans to non-financial
corporations neither in the fourth quarter of 2016 nor in the first quarter of 2017. However,
one bank intends to slightly ease credit standards for loans to small and medium-sized
enterprises in the second quarter of 2017.
Similar factors contributed to the use of slightly eased terms and conditions for loans to
households. In the first quarter of 2017, one Latvian bank somewhat reduced the margin on
loans to households for house purchase and slightly eased general terms and conditions for
consumer credit and other lending to households. Even though the terms and conditions for
loans to non-financial corporations were mainly eased in the first half of 2016, they were
somewhat tightened between the fourth quarter of 2016 and the first quarter of 2017. In the
fourth quarter of 2016, one Latvian bank slightly raised its non-interest rate charges for
loans to small and medium-sized enterprises, and one bank increased the spread over the
money market reference interest rate on risky loans to large enterprises in the first quarter of

19
June 2017
2017. A Latvian bank tightened terms and conditions for loans to non-financial corporations
in relation to prevention of money laundering and financing of terrorism.
In the fourth quarter of 2016 and first quarter of 2017, the demand for loans in Latvia's
credit market increased further both in the sector of non-financial corporations and that of
lending to households. Banks observed that it was the demand for loans by small and
medium-sized enterprises that had expanded more during the reporting period. This was
facilitated by the necessity of enterprises to invest in fixed assets and use short-term loans to
supplement their inventories and current assets, refinance and restructure their debt as well
as agree on new conditions. The household sector saw a rise in the demand for consumer
credit and other loans for two consecutive quarters since households needed funding to
purchase durable consumer goods (cars, furniture, etc.). Latvian banks expect that the
demand by all lending sectors for loans to enterprises, loans to households for house
purchase as well as for consumer credit and other lending to households will continue to
grow.
Overall, the results of the euro area bank lending survey suggest that the credit market
situation is favourable for further recovery of lending. The non-standard monetary policy
instruments employed by the ECB, competition among banks and the raising of the risk
tolerance limits contribute to the decline in lending rates as well as to easing of terms and
conditions with regard to other loans. The necessity to make long-term investment of
different kinds and low interest rates facilitate demand in the environment of increased
economic activity.
2.6 Cross-border financial flows in the balance of payments
The cross-border financial flows in 2016 overall were affected by the decisions made by both
the private and public sectors. Foreign assets posted a higher increase of 2.0 billion euro than
foreign liabilities growing by 1.5 billion euro. The foreign assets reflected in the financial
account expanded more than liabilities in the first quarter of 2017 (by 582.7 million euro and
336.9 million euro respectively).

20
June 2017
In 2016, the largest cross-border financial flows in the private sector on the asset side
accounted for decreases in the deposits of credit institutions with foreign banks and in
portfolio investment abroad totalling 2.3 billion euro. This was driven by outflows of foreign
customer deposits with Latvian credit institutions on the liabilities side observed already
since the beginning of 2016 (3.2 billion euro in 2016; 32.9 million euro in the first quarter
of 2017), which were offset by credit institutions by cutting their foreign assets. In the first
quarter of 2017, portfolio investment abroad continued on a downward trend, but credit
institutions' deposits with foreign banks increased. Changes in the deposits of some credit
institutions reflect the regular interbank transactions which are affected by the bank group
decisions on intra-group liquidity shifts.
The flows determined by the public sector decisions were primarily related to the
participation of Latvijas Banka in the expanded APP within the framework of the
Eurosystem's monetary policy measures. Overall, Latvijas Banka invested 2.7 billion euro in
foreign assets in 2016. The programme continued also in the first quarter of 2017.

21
June 2017
3. Sector Developments
Previous assessment Developments since the
previous report
New assessment
Manufacturing
Robust growth in 2016, weaker
but still resilient growth in 2017.
– Robust growth towards the
close of 2016, with slight
deceleration in the first quarter
of 2017;
– moderately optimistic sectoral
and business assessment for 2017
in general.
Resilient growth in
2017. Accelerating construction
activity expected to promote
output growth in some sub-
branches of manufacturing.
Construction
Marked output contraction in
2016; recovery in 2017 slightly
more moderate than projected.
– The downward trend
discontinued at the end of
2016; the beginning of 2017
characterised by buoyant growth;
– the sector association predicts
a large construction output
concentration in 2018.
Strong recovery in 2017; fund
profile likely to boost sector
activity in 2018.
Transport
Substantial freight volume
contraction in transportation
by rail and at ports in 2016 but
lesser respective drop expected
in 2017; as of road transport, the
swift previous acceleration is
unlikely to continue (the sectoral
value added is likely to shrink
overall).
– Recently better freight volume
developments at ports and by rail
than expected.
Transport sector stabilisation:
in 2017, improvements in
rail transportation and at
ports vis-à-vis the previous
year are expected; growth in
transportation by road, on the
other hand, likely to be blocked
by protectionist measures in the
EU countries. In comparison with
2016, the sectoral value added
unlikely to rise notably.
Real estate market
Gradual recovery of housing
prices and market activity in
2016, which is likely to become
more pronounced in 2017 due to
lending expansion.
– Serial type apartment price
hikes to accelerate gradually;
– market activity continuously
on a moderate rise, exceeding the
notable increase in transaction
activity of 2016.
Further rise in housing prices and
market activity in 2017.
Trade
Positive contribution from one-
off factors actual in 2016, likely
to weaken in 2017; new factors
mostly unlikely to push up
demand, hence aggregated sector
growth in 2017 expected smaller
than projected.
– Volatile output dynamics at the
end of 2016 and in early 2017;
– several intra-sector projects
announced, with the impact from
them felt in a longer term.
The 2017 sector growth similar
to 2016 trends, with somewhat
faster pace of sector development
possible in up-coming years.
3.1 Manufacturing
The end of 2016 and the beginning of 2017 were very successful periods for manufacturing.
In the fourth quarter of 2016, sector's value added picked up 10.1% (according to seasonally
and calendar day adjusted data), while a 10.3% increment was recorded for the first
3. SECTOR DEVELOPMENTS

22
June 2017
quarter of 2017. The manufacturing output volume at constant prices grew quarter-on-
quarter by 3.6% in the fourth quarter of 2016, such performance assessed as very good. By
comparison, the quarter-on-quarter increase in manufacturing output in the first quarter of
2017 was 0.1%. It should be taken into account, however, that, this poor quarterly growth
notwithstanding, the annual changes remained at a very high level (6.7%). The sector's
recent good progress is mainly determined by favourable external developments, with both
economic and sentiment indicators of major foreign trade partners improving. Also, the
surveys of sector enterprises and associations confirm that the external demand for sector's
output became stronger at the end of 2016 and in early 2017.
Even though the recent performance of sector is overall assessed as very good, its production
has been fluctuating under the influence of different sub-sectoral developments over time.
For instance, most likely driven by one-off factors, the output growth in wood industry
decelerated notably, thereby causing performance plummeting for the whole sector early in
the year. Nevertheless, a longer-term outlook for sectoral growth is assessed as positive.
In the first quarter of 2017, contributors to sectoral growth were such sub-sectors (branches)
as the manufacture of computer, electronic and optical products, electrical equipment, as
well as machinery and transport vehicles and their components. The growth continues to
be broad-based, covering most sub-sectors of manufacturing. Robust annual growth in
manufacture of fabricated metal products in combination with good building material output
data confirm the strengthening of construction activity implied by the GDP data release.
The manufacture of furniture and beverages as well as the chemical industry demonstrate
a dynamic growth. The manufacture of food products, the second largest sub-sector, by
contrast, continues to display growth rate volatility, lingering close to zero. The sector
stagnation has become protracted. Amidst limited domestic market conditions, exports figure
as the only means of boosting output. Admittedly, capturing new export markets, particularly
for food products, is a complicated and time-consuming activity. Wood processing, the
largest manufacturing sector, has been sending negative signals: as February and March data
were very weak, growth vis-à-vis the previous year was insignificant. Sector businesses,
however, reject the presence of any fundamental changes, and the upcoming months are
likely to see a further, albeit less dynamic, advance of the sector.
In general, the beginning of 2017 has been quite successful for manufacturing, with its
continuation anticipated on the same positive note. The external environment shows gradual
improvement of the situation, which is very well attested also by the results of the recent
Latvian industrialists' survey and the answers to the EC business sentiment survey. The latter
survey excels in almost unprecedented indicators relative to the assessment of the volume
of both orders and output projected for the future. The estimated capacity utilisation is also
record high, at 74.8%.
Only 37.4% of all manufacturers name insufficient demand as a serious growth-restricting
obstacle (the indicator was at such a low level during the pre-crisis period). Meanwhile, the
share of businesses admitting labour force hiring problems as a significant growth-restricting

23
June 2017
factor is gradually growing (16.6%). However, this indicator cannot be assessed as very high
in historical terms, as there have been periods with every second manufacturer considering
this factor significant.
Of late, manufacturing has demonstrated stable remuneration rises. They are likely to take
place also in the near future. Despite overall positive profitability in the sector in previous
years, the sub-sectors' performance has displayed differences, which seem even more
pronounced in the breakdown by individual business. Amidst persisting remuneration rises,
businesses will have to look for new opportunities to boost productivity and profitability
so that such wage growth becomes sustainable. The pressure from labour demand is likely
to strengthen gradually also in other sectors. Hence investing in production, performance
efficiency, innovations, etc. will be of crucial importance. Non-financial investment statistics
show that of late the year 2016 has been the weakest in terms of investment. Despite the
somewhat rising investment activity in early 2017, the overall investment level is still low,
thereby undermining the growth potential in the sector.
Manufacturing production is expected to post a pickup of about 4%–5% in 2017. The
so far substantial increment should be attributed more to the end-2016 and early-2017
performance. Over time, the sector's performance should moderate, thereby reflecting trends
of the gradual external environment recovery. Steeper growth of the sector is held back by
investment shortages of the past.
3.2 Agriculture
In 2016 vis-à-vis 2015, value added in agriculture increased by 1.9% at constant prices and
decreased by the same percentage at current prices. Agricultural non-financial corporations
posted a net turnover decline of 7.9% in 2016. Such weak sectoral performance in 2016 was
underpinned by contracting grain harvesting, the low average purchase price for milk, and
the epidemic of African swine fever.
Against 2015, total cereal harvest in Latvia shrank by 10.5% in 2016, notwithstanding
a 6.5% extension of the sown area. It was the second largest harvest in Latvia's history
(2.7 million tons; a record harvest of 3.0 million tons in 2015). According to the CSB data,
cereal purchases decreased by 8.3%, with the average purchase price also going down. This
was driven by falling prices at global grain markets and the quality of grain, most of the
purchased grain being of feed grain quality due to unfavourable weather conditions. The
average purchase price of grain was 134 euro per ton in 2016 (the lowest average purchase
price since 2010). From January to April 2017, the global grain price index rose somewhat
on average (by 4.3%) in comparison with autumn 2016 when it was at its low. A higher grain
price in global markets had a positive impact on price developments in Latvia, where the
average purchase price elevated by 12.6% year-on-year in the first quarter of 2017.
According to the information compiled by the Agricultural Data Centre, the volume of raw
milk straight from the farm slightly increased year-on-year in 2016. The respective year-on-
year figure for the first quarter of 2017 remains almost unchanged, despite the current trend
of reducing the number of dairy cows not vanishing since 2015. The average purchase price
of milk, on the other hand, kept on climbing in December and January consistently with the
trend since August 2016, most likely because of the growing demand for milk across global
markets. In February, however, its price rebounded again, increasingly lagging behind the
EU average milk purchase price.
In livestock breeding, the focus is still on fighting African swine fever which is spreading
in Latvia for the third consecutive year. Pork prices report an upswing, with purchase prices
rising in both domestic and global markets. China (the largest pork importing market in the
world) acts as the first factor to trigger price changes. The supply deficit on its domestic meat
market is addressed by making bulky pork purchases from Europe (now almost two times

24
June 2017
more than in 2015). In Europe (e.g. in Denmark, the Netherlands, Belgium and Germany) in
turn, the number of pigs has notably declined.
The effects from global price trends are expected to weigh on agriculture in 2017. Globally
good wheat harvests are projected to supplement the already existing large stocks of wheat,
thereby not encouraging grain price upswings. In addition, rains during grain harvesting in
2016 caused financial losses, with an adverse impact on investing activities in the sector
in 2017. Milk prices in the EU market elevated, thereby reducing concerns about notable
adverse fluctuations in milk prices in Latvia, because historically the average purchase
price of milk has always interdepended on global trends. Overall, no marked changes in
comparison with the previous year are to be expected in 2017.
3.3 Construction
Weak performance of the construction sector in 2016 was primarily determined by the
delayed drawdowns from the EU funds. In 2016, the construction sector's value added
shrank by 17.9%, and some recovery started in the last quarter of the year. The rebound in
the previous downward trend became evident in the first quarter of 2017, when value added
posted a pickup of 5.0%, with the annual increase measuring 3.1% according to seasonally
and calendar day adjusted data.
The upswing in construction output in the first quarter (2.2% according to seasonally
adjusted data) was mainly driven by expanding construction of non-residential, e.g. trade,
industrial and warehouse, buildings. Following the recovery in the fourth quarter of 2016,
the segment of multi-dwelling residential buildings saw the construction output shrink
in the first quarter of 2017, albeit the annual growth rate remained strong. Building of
civil engineering structures, on the other hand, continued to stagnate, still anticipating
improvement in the availability of EU funding, lack of which was the main obstacle for
construction growth also in 2016. Seasonally adjusted volume changes in building civil
engineering structures turned somewhat negative again in the first quarter of 2017 (despite a
slight increase in the fourth quarter of 2016).
The most recent prudent estimations by the Ministry of Finance of the Republic of Latvia
relative to availability of financing from the EU funds are above the actual materialisation
in 2016. The CSB data suggest that the fast growth seen in the first quarter of 2017 was
mainly driven by construction unrelated to co-financing of the EU funds. Businesses in
the construction sector also voice their expectations for more intensive absorption of
the EU funds prospectively in the second half of the year. Developers' plans to set in
motion many privately financed construction projects (building of trade space, office
buildings, warehouses and industrial space) corroborate the sector's growth potential. The
implementation of such large projects as building of the trade centre "Akropole", IKEA
store and New Hanza City has started. In addition, the sector growth has been spurred by
favourable weather conditions at the beginning of the year which allowed for the start of an
early building.
The leading construction indicators have been improving since the middle of 2016 and ever
increasingly point to changing sentiments of sector businesses: employment expectations
taken from EC surveys for the first five months of 2017 already indicate an increase. The
order assessment is continuously becoming better, and the period secured with orders in
the first half of the year was on par with the 2014 level; likewise, the indicator of overall
builders' sentiment, albeit still negative, has improved two times vis-à-vis the lowest level
in mid-2016. The production of building materials reflecting the demand in the construction
sector, in turn, accelerated in 2016.
The start of 2017 is likely to have ushered in a productive period for the sector. The Ministry

25
June 2017
of Finance of the Republic of Latvia plans for EU funding injections into the Latvian
economy have exceeded the level of 2016; also in the years to come, the absorption of EU
funding is to increase to make up for the delay in 2016. Following a temporary stagnation,
the construction of residential buildings sends signals of recovery in activity due to resident
demand, while the construction costs do not suggest the emergence of a sustainable
growth trend yet. The low 2016 base in the segment of non-residential buildings and civil
engineering structures, when projects co-financed by the EU funding stagnated and large-
scale construction projects were scarce, will encourage the achievement of a faster growth
rate in 2017. The stances of both sector businesses and associations also point to their plans
of launching larger projects in 2017 and some upcoming years.
To address the risk of economic overheating associated with the access to the EU funding
renewed after a period of notable drop in the first half of 2016, the Ministry of Finance
of the Republic of Latvia has revised notably down the EU funding projected for 2017
and 2018, allocating flows to the years to come. Considering the previously incurred fund
administration problems, the forecasts are likely to be of pessimistic nature. With private
sector projects gaining momentum, a planned reduced accessibility to the EU funding in
the near term may prevent potential overheating, shortages of work force and rising costs
in the construction sector. Based on information available to the sector association on
future projects, it is anticipating a more pronounced private and EU co-financed project
concentration in 2018.
3.4 Real estate market
In 2016, the real estate market recovered from adjustments triggered by more stringent
investment criteria for the entitlement to temporary residence permits. Value added in real
estate activities declined somewhat (by 0.6%) in the fourth quarter of 2016 and the year as a
whole, even despite stronger activity and an increase in the number of transactions. Also in
the first quarter of 2017, changes in value added were still slightly negative.
According to the data of the Land Register, following a notable rise in 2016, the number
of real estate transactions in the first five months of 2017 was similar to the level of the
respective period of 2016. At the beginning of 2017, prices of standard apartments continued
a steep upward trend, characterised by growth acceleration to around 8% in annual terms.
Real estate enterprises acknowledge price rises at an albeit slightly slower pace in segments
of other dwelling construction (e.g. in new projects) as well. The house price index compiled
by the CSB, which has been on the rise since the late-2014 correction and which in the
fourth quarter of 2016 pointed to a price level slightly exceeding the high recorded for the
third quarter of 2014 in the segment of used housing, shows that the recovery of real estate
market activity had translated into higher prices. The CSB's turnover index of real estate
enterprises shows that, in contrast to renting or managing real estate, it is in real estate
purchase or sales transactions that value added drops more notably. This can be explained
by the growing number of transactions and falling average value of a transaction (a smaller
share of large transactions).
Transaction numbers and housing prices are expected to go up gradually also in 2017.
Amidst rising income levels and shrinking debt liabilities, the purchasing power of Latvian
households is improving, while the amount of new loans for house purchase is growing.
The state aid programme for young families to purchase housing, implemented by the JSC
"Attīstības finanšu institūcija Altum", promotes the activity in the real estate market and
enjoys political support for its continuation, including the government-approved intention
to extend the target audience by including young specialists in the programme. The overall
number of programme participants is likely to increase in the near future. The amount of
loans issued under the programme accounts for around one third of overall lending for house
purchase.

26
June 2017
3.5 Trade
The growth of the trade sector had decelerated since 2014, with its value added at constant
prices increasing by 3.4% in 2016.
A pickup in wholesale, following a rapid acceleration in the fourth quarter of 2015, did
not continue in 2016. Its annual rate of increase decelerated until the end of the year and
amounted only to 2.0% in the first quarter of 2017.
In 2016, sales of motor vehicles benefited from purchases by legal persons and a rise in
leasing activity in 2016. The increasing purchasing power coupled with more favourable
lending and leasing offers to households allowed developing sales of new cars in 2016.
Nevertheless, the number of cars newly registered with the Road Traffic Safety Directorate
decreased in general, pointing to the small market, i.e. opportunities to develop the sector
in the domestic market are limited. Data covering the first months of 2017 suggest that
the annual growth rate of both trade and car registration has been positive. However, such
development might have been affected by one-off factors, e.g. different ways of calculating
the vehicle operation tax (based on the volume of carbon dioxide (CO2
) emissions) and the
imposition of a fee on motor vehicles registered abroad and participating in road traffic in
Latvia.
In 2016, the total retail trade turnover at constant prices edged up by a mere 2.5%, which
was the slowest growth rate recorded in five years. Retail trade growth stabilised at the end
of the year. The quarterly rate of increase (seasonally adjusted data) returned to positive
territory and even accelerated in the first quarter of 2017. Retail profitability calculated
on the basis of quarterly data also remained stable in 2016, suggesting that consumer
purchasing power was rising. According to the CSB revised data, an increase in net
remuneration was steeper in 2016 than initially estimated, but the average annual inflation
was close to zero. Thus, purchasing power was edging up and retailers could maintain the
rate of return irrespective of the slightly decreased turnover.
An increase in consumer confidence observed along with a modest improvement in retail
confidence outlines retail development in the coming months. It is likely that in the medium
and long term retail might concentrate in larger trade centres and retail chains which are
better placed to reduce costs. This is confirmed by the withdrawal of the JSC Prisma Latvija
from operation in Latvia due to the overestimated market opportunities (supermarkets
occupied large spaces which could be adapted to the needs of new lessees), by strengthening
the largest retail chains (construction of the new logistics centre of RIMI LATVIA Ltd. has
been commenced, MAXIMA Latvija Ltd. is opening new shops) as well as concentration
of services in one location to increase the number of buyers in shops and service companies
(e.g. in the new thematic centre Decco). Also, IKEA will occupy the segment dealing with
maintenance and improvement of the dwelling. The new entrant will most likely compete
with smaller manufacturers and traders and could in part service, e.g. Estonian consumers.
Examples suggest that purchases of durable goods gain in importance rather than those of
prime necessity goods (due to an increase in purchasing power and access to financing), but
at the same time another challenge has surfaced, i.e. the small market makes its participants
explore new solutions to competition.

27
June 2017
Vision of trade development has remained broadly unchanged since the publication of
the December Macroeconomic Development Report. From the historical point of view,
retail development is fairly well in line with dynamics of purchasing power. However, the
common trend has weakened since the second half of 2016. Purchasing power will not
accelerate in the short term as higher inflation will offset a steeper rise in wages. However,
expansion of the large retailers like the entry into the market of new enterprises will partly
result in market redistribution and only partly – growth of the sector which could ensure over
time not only the classical retail services in a specific field but also more abundant supply.
They could also include wholesale and logistics services provided to foreign partners.
3.6 Transport
During almost the entire 2016, the transport sector was characterised by a contraction
of cargo volumes at ports and decrease in cargoes by rail. The last two quarters of 2016
also saw a decline in the turnover of road freight transport. Overall, the transport sector's
revenue generated from export services fell due to the contribution provided by maritime
and rail transport. Nevertheless, the value added of the transport sector augmented by 1.1%
in 2016, following a marginal contraction in 2015. This was on account of the excellent
results achieved by road transport at the beginning of 2016 and the very good growth of the
air passenger transport observed throughout the year. The fourth quarter of 2016 and first
quarter of 2017 (compared to the previous quarters) saw an increase in value added in the
sector as a whole, i.e. 1.2% and 3.0% respectively. The preliminary data on the volume of
cargoes at ports and in rail transport as well as the successful result provided by exports of
transportation services at the beginning of the year confirmed the rapid growth in the first
quarter.
At the end of 2016, the volume of cargoes at ports and the volume of rail freight started to
recover, and this recovery continued also at the beginning of 2017. In the breakdown by
port, the Port of Ventspils, where the volume of transhipped cargoes the level last seen in
2015, has recorded the sharpest rate of increase. The high-sounding news about the refusal
by the Russian state railway company Rossijskije žeļeznije dorogi to approve a significant
part of the demand for freight transportation to Latvia's ports is most likely exaggerated.

28
June 2017
However, this news reiterates that cooperation with Russia is fragile and depends on political
considerations and that it is important to seek more stable alternatives.
In the breakdown by type of cargo, the volume of coal cargoes has expanded more
significantly, while that of oil products continues to contract. The volume of transhipped
containerised freight has been increasing since the end of 2016. The pickup in transhipped
coal cargoes can be significantly attributed to global trends characterised by a higher demand
for coal and its price rise. For example, imports by China, the central participant of the coal
market, have augmented by a third in the first four months of 2017 year-on-year. Although
China's demand for coal will continue to move up, the country's coal mining will also be on
the rise as the previously established restrictions on mining have been lifted. Thus, the rapid
expansion of imports will most likely discontinue, and this will also be reflected in global
coal prices.
Overall, the weight and turnover of freight transported by road changed only slightly in
2016, and this situation should be viewed as negative in comparison with growth observed
in the previous years. The second half of the year saw a decrease in turnover in the segment
which had previously registered the highest growth, i.e. shipments between foreign countries
(mainly between EU countries). Meanwhile, the first quarter of 2017 saw a sharp increase in
inland transport again and a relatively small pickup in international transport (therefore, the
weight of the transported cargoes has demonstrated a surge, but their turnover – significantly
smaller growth). Major risks posed to road transport are still related to the protectionist
policy pursued by EU countries as an increasing number of countries impose limits and
tighten rules with regard to carriers from other countries.
The SJSC Riga International Airport reached a record-high number of passengers served
in 2016, and the passenger numbers continued to rise also in the first four months of 2017
(6.3%). April saw buoyant growth of the number of passengers which was most likely
related to the seasonal effect of Easter in March 2016.
It is expected that in 2017 the sector will not face the contraction of freight volume seen in
2016. The value added of the industry might broadly remain at the level recorded in 2016.
The pickup observed at the beginning of 2017 (reflected by the preliminary data) allows to
project more positive development of the sector than that seen at the end of 2016. However,
it should be taken into account that the upward path is largely related to coal cargoes whose
volume depends on external factors which are hard to foresee, i.e. the global demand for
coal, their prices and Russia's policy. Moreover, the value added originating from coal
cargoes is small. Meanwhile, the CSB data suggest that turnover of freight transportation
by road has been volatile in recent quarters, and problems related to the protectionist policy
pursued by EU countries may continue.
3.7 Gross domestic product
GDP growth has been relatively strong. In the fourth quarter of 2016, GDP increased by
1.2% quarter-on-quarter (seasonally adjusted data) but in the first quarter of 2017 – by 1.6%.
Thus, the annual GDP growth reached 4.0% in the first quarter of 2017, demonstrating good
performance. However, growth factors differed in the above two quarters.
Manufacturing growth, which was mainly driven by an improving situation in the external
environment, was the largest contributor to GDP growth in the fourth quarter of 2016.
Electricity generation reached a very high level, which contributed positively to GDP
growth. The contribution provided by a rise in the collected product tax was also positive.
Meanwhile, manufacturing, construction and the transport sector were the largest contributors
to growth in the first quarter of 2017. A significant positive contribution to GDP growth came
also from trade, energy and the public services sector in the first quarter of 2017.

29
June 2017
Also, in 2017 overall, the most fundamental question concerns the strength of construction
recovery. The first quarter has shown good results, and constructors stress that the year 2017
will be better than 2016. Taking account of the low base of 2016, the range of recovery
intensity of the sector is very wide. It is successes or failures of construction that will largely
determine the volatility of GDP growth rate in the quarters to come. It is expected that
manufacturing will increase at the pace observed in 2016 or somewhat slower. Although the
first quarter of 2017 has delivered good preliminary results, the transport sector will not see
a significant rise in value added. Development of the trade sector will also follow the trends
observed in previous years.
The GDP forecast published in December 2016 was revised upwards by Latvijas Banka
on 23 March 2017. Thus, part of the factors pointing to the need to increase the forecast
since the publication of the previous Macroeconomic Development Report has already been
included in the forecast revised in March. However, positive sectoral preliminary statistical
data and the GDP flash estimate for the first quarter of 2017 allow further upward revision of
GDP. Seasonally and calendar non-adjusted data suggest that GDP is likely to grow by 3.3%
in 2017 (3.0% according to the previous projection), but the seasonally and calendar adjusted
data show that it could increase by 3.7% (3.4% according to the previous projection).
Further GDP growth has been forecast in 2018 (3.4% according to seasonally and calendar
adjusted and non-adjusted data). However, the uncertainty surrounding the year 2018 is
greater. The external environment might witness new developments and shocks, other trends
might emerge in relation to the absorption of EU structural funds, and a crucial question here
is whether the tax reform approved by the Cabinet of Ministers of the Republic of Latvia
will be implemented and how it will be done.

30
June 2017
4. GDPAnalysis from the Demand Side
Private consumption
Stable growth in private consumption. – Despite an increase in wages and
salaries expected in the public sector in
2017, the total purchasing power will not
grow more rapidly than in the previous
year due to a rise in inflation;
– the lending development could
allow channelling a part of funds into
investment (house purchase) rather than
consumption.
The annual growth
rate of private
consumption has
remained broadly
unchanged.
Investment
Weaker-than-forecast investment
growth in the second half of 2016
on account of more sluggish
implementation of projects co-
financed from EU funds.
Absorption of EU funds will be
relatively steady in the coming years.
Therefore, the recovery will be slower
in 2017 and more rapid in 2018.
– The revised data on investment are more
positive in 2016;
– in the first quarter of 2017, government
investment has grown, with many private
sector investment projects announced
and launched across different sectors;
the results are already reflected in the
construction data.
The contribution of
investment to GDP
growth will increase
and approach
the positive
contribution
of private
consumption in
2017.
Exports
Moderate rise in real exports in 2016.
Growth rate has been reduced in 2017
due to weaker external demand.
– External demand forecasts have
been revised upwards on account of an
improvement in the euro area outlook;
– new information and revised data on
exports suggest more rapid growth in the
fourth quarter of 2016 and the first quarter
of 2017.
The growth rate
of exports of
goods and services
has been revised
upwards for 2017.
Imports
Rapid, albeit slower than previously
projected, expansion of real imports
in 2016 and 2017.
– New information on imports in the first
quarter; revision of historical data;
– short-term data, e.g. data on the
construction sector development and
government investment expenditure,
suggests that investment growth may be
faster than previously estimated.
A steeper rise in
investment will
result in an increase
in demand for
imports of capital
and intermediate
goods.
Government consumption
Steeper rise in expenditure in 2017
on account of the approved additional
funding for remuneration, the health
care sector, defence, etc.
– At the beginning of the year,
government consumption increased at the
projected rate.
The government
consumption
assessment has
not been changed
significantly.
Over the last four years, GDP growth was supported by an expansion of private
consumption. However, in 2017 a significant positive contribution from higher investment
activity is expected to be an additional driver to GDP growth. An expansion in imports
will be facilitated by both the government and the private sector investment in 2017. This
is already reflected in the monthly data for the first quarter suggesting an increase in the
4. GDP ANALYSIS FROM THE DEMAND SIDE

31
June 2017
government capital expenditure, also supported by the information on the foreign trade
flows of goods. Growth in foreign trade turnover was, however, partly affected by the
global commodity prices. For instance, the oil and food prices in the global market reached
quite a substantial year-on-year increase at the end of 2016 and in the first months of 2017.
However, foreign demand also followed an upward trend facilitating exports of both goods
and services. The share of technology-related services' exports increased significantly. In
addition, a growing contribution was also ensured by the construction services during the
period when the construction companies were looking for new business opportunities due to
the slow absorption of EU funds.
4.1 Private consumption
The contribution of private consumption to GDP growth is unlikely to increase in 2017.
According to the CSB data updates, in 2016 net remuneration increased at a slightly faster
rate than estimated initially; however, since inflation was close to zero, the increase in
purchasing power was close to that in net wages and salaries. Since the positive contribution
of food prices to inflation has recovered, the average annual inflation rate might reach 2.9%.
Consequently, even considering that the rise in the public sector remuneration is steeper than
that in 2016, growth in the total purchasing power is not expected to accelerate. Meanwhile,
the consumer sentiment has continued to improve since the end of 2016, along with positive
trends in economic activity and better labour market indicators.
Improvements in the retail trade sentiment in some retail trade segments can be explained
by the monthly data on the lending development and a more positive consumer sentiment.
For instance, with loans for house purchase increasing, the funds otherwise directed to
other consumption needs might now be used to purchase house furnishing goods. Thus,
the increase in private consumption may still be somewhat slower than that in disposable
income, while the trend of building up savings is also likely to continue.
4.2 Investment
According to the CSB data updates, published simultaneously with the GDP data for
the fourth quarter of 2016, investment declined by 11.8% in 2016, representing a less

32
June 2017
pronounced decrease than estimated initially; however, the effects of higher private
consumption were fully offset by a negative contribution of gross fixed capital formation to
growth. The shrinking investment was also reflected by a reduction in real imports of capital
goods not observed in the previous years. Investment conditions improved somewhat in the
fourth quarter: according to the adjusted data, the quarterly growth rate accelerated. This
may have been influenced by the fleet renewal launched by JSC Air Baltic Corporation, the
national airline of Latvia.
A number of indicators suggest a significant contribution of investment not only in the first
quarter but also throughout the year. Government capital expenditure increased by more
than 40% year-on-year on account of both the more rapid absorption of EU funds and more
intensive implementation of projects, in particular that of local governments, financed from
the basic budget. In addition, quite large private sector investment projects are launched in
both the manufacturing sector and various services sectors. These include the construction
of trading and logistics centres (RIMI LATVIA Ltd., IKEA), as well as infrastructure
projects, e.g. the construction of Ķekava bypass, etc. Such projects will initially support the
construction sector finding reflection in investment. Meanwhile, the sectors commissioning
the projects are expected to develop in the medium and long term. Moreover, not all
investment will be capacity-strengthening, i.e. will lead to accumulation of capital, since it
will partly replace capital depreciation, e.g. in several infrastructure projects and, in part, the
planned renewal of the fleet of JSC Air Baltic Corporation. At the same time, it should be
noted that the need for investment is signalled by a high level of capacity utilisation, e.g. in
manufacturing.
In 2016, inflows of foreign direct investment in Latvia accounted for 0.5% of GDP, the
largest ones being channelled into the sectors of trade, transportation and storage as well
as information and communication services mainly from Luxembourg, Russia and Austria.
In 2016, a decrease in direct investment inflows was observed in Latvia as compared to the
data for the previous year – 2.5% of GDP. This can be explained by the capital structure
optimisation of Swedbank AS group in 2016, resulting in a fall in direct investment in
Latvia. Apart from this one-off factor, the level of direct investment inflows in Latvia was
similar to that in 2015. Direct investment inflows in Latvia accounted for 2.4% of GDP

33
June 2017
in the first quarter of 2017. The largest inflows of investment were recorded in real estate
activities, the sectors of electricity, gas supply and heating as well as the sectors related to
information and communication services. Looking by country, most investment came from
Russia, Luxembourg, Norway and the Netherlands.
4.3 Exports
In early 2017, income from exports of goods was significantly boosted by the stabilisation
of economic growth in the largest export markets, the revival of external demand and a more
positive foreign consumer sentiment, as well as by improved competitiveness of Latvian
businesses and higher export prices. Nominal exports of goods went up by 10.1% year-on-
year in the first quarter. The available monthly data on the dynamics of export unit value
point to a positive contribution to economic growth in real terms. An expansion in exports
was recorded for nearly all commodity groups. The largest positive contribution to growth
in exports of goods came from food products, wood and products of wood, animal products,
transport vehicles, products of the chemical industry and products of basic metals.
In the fourth quarter of 2016 and in 2016 overall as well as in the first quarter of 2017,
income from exports of services continued on an upward trend, mostly supported by
construction services, in particular, those provided in Sweden and Norway as well as
in Germany and the UK, as companies were seeking alternative business opportunities
due to the sluggish absorption of EU funds in the domestic market. The contribution of
telecommunication and computer services continued to increase; however, in the first
quarter of 2017 their growth rate was slower due to a base effect. At the same time, in the
fourth quarter of 2016 and in early 2017 the spending of foreign visitors in Latvia continued
on a downward trend in comparison with the corresponding period of the previous year.
Conversely, the number of visitors arriving in Latvia and their length of stay continued
growing. In 2016 overall, the number of visitors from Russia also posted a slight increase of
2.5%. Allthough in 2016 exports of transportation services saw a decline, it was more than
offset by an upturn in telecommunication and computer services as well as in construction
services. Thus, income from exports of services continued to expand by 5.1%, a rate similar
to that of the previous year. A year-on-year rise was also recorded in the first quarter of 2017.
According to the preliminary 2016 data collected by the WTO, the share of Latvia's exports
of goods and services increased year-on-year both in the EU and globally. This suggests a
positive development, taking account of a decline of Latvia's share in the global market of
services in 2014 and 2015 and that in the global market of goods in 2015. Eurostat data on
Latvia's trade with EU countries also suggests that the export share of Latvia's goods in the
EU market continues to grow and the competitiveness is improving. Cost competitiveness
deteriorated somewhat in 2016; however, the profitability of Latvia's businesses remained
stable and even improved in several exporting sectors.
4.4 Imports
Imports of goods also grew significantly in the first quarter of 2017. An increase in both
consumer goods and intermediate and capital goods suggests the strengthening of domestic
consumption and higher investment activity. Businesses increased their demand for
commodities for manufacturing products to be exported or sold in the domestic market.
The increase in the value of imports was also partly driven by the effects of prices, those of
mineral and food products in particular. Nominal imports of goods expanded by 13.3% in
comparison with the first quarter of the previous year. Like in January, a large contribution
to the annual increase in imports of goods also came from purchasing a Bombardier CS300
aircraft in March, according to the information provided by JSC Air Baltic Corporation to
the media. By the end of 2017, the national airline fleet will have eight aircrafts of this kind.

34
June 2017
Meanwhile, in 2018 and 2019, twelve more aircrafts are planned to be received (six each
year), providing a further substantial contribution to the increase in imports of goods.
In the fourth quarter, nominal imports of services also continued expanding by 4.6%,
largely on account of imports of telecommunication and computer services, as well as the
household spending abroad. In 2016 overall, imports of services grew by 4.1%, less than in
the previous year, facilitating an improvement in the balance of services. Imports of services
also continued on an upward trend in the first quarter of 2017 spurred by construction
services and other business services, particularly those related to accounting and marketing.
4.5 Government consumption
In the first quarter of 2017, government expenditure on both goods and services increased
at the expected rates, i.e. by 7.4% year-on-year. This was partly offset by a decline in
the subsidy and grant expenditure. Consequently, the government consumption forecast
for 2017 has remained unchanged. In 2017, government consumption is expected to
grow at a somewhat higher rate than in 2016. Already in the first quarter, the increase in
government consumption was driven by a rise in the wages and salaries of teachers, police
staff and judicial staff as well as by higher minimum wages envisaged in the Law on State
Budget 2017, along with a robust increase in the government expenditure on goods and
services.
It should be noted that government investment is resuming. This is suggested by the capital
expenditure data: following a record low in the previous year, in the first quarter of 2017
capital expenditure grew by more than 40%. This also points to a gradual renewal of access
to the EU funds. With mutually offsetting dynamics of expenditure items, total government
expenditure rose only slightly in the first quarter (by 1.4%). Due to the moderate increase in
expenditure, together with a persistently high rise in tax revenue (mainly revenue from VAT,
personal income tax and excise tax), the general government consolidated budget balance
improved by 51.3 million euro in comparison with the corresponding period of the previous
year.
According to ESA 2010 methodology, Latvijas Banka's assessment of 2017 government
budget balance has been revised upwards by 0.2 percentage point (up to a deficit of 1.0%
of GDP). More accelerated economic growth, along with an increase in inflation and a
decline in the grey economy, brought about higher-than-projected tax revenue collections.
Consequently, the budget revenue forecasts have been revised upwards. At the same
time, the risk associated with the rate of absorption of EU funds persists. More active
absorption of EU funds would result in a steeper rise in government investment, thereby
positively affecting the overall economic growth; however, this would also result in a larger
government deficit.

35
June 2017
5. Labour Market
Unemployment
A gradual decline in
unemployment (close to
its natural level).
– The unemployment rate is declining in line
with forecasts;
– the number of businesses referring to labour
shortages is increasing.
The previous
assessment has
remained broadly
unchanged.
Remunerations
In 2017, the average
remuneration is
expected to rise by
5.0%. A similar growth
rate will persist also in
the medium term.
– The average remuneration data for 2016 have
been revised upwards by the CSB;
– the increase in remuneration in the private
sector slightly exceeds the projected level.
remuneration will
rise by 6.0%. The
medium-term forecast
has not been changed
significantly.
The labour market situation is becoming more favourable for employees. With the pace of
economic growth increasing, the decline in unemployment has accelerated somewhat. The
current unemployment rate (9.4% of the economically active population in the first quarter
of 2017) is below the historical average of Latvia and slightly below the euro area average.
Latvijas Banka's assessment of the natural rate of unemployment has not been changed
significantly – the cyclical unemployment component has remained close to zero since
2013. The actual and natural unemployment rates are expected to decline gradually also in
the future. However, the latest labour market developments increase the likelihood that the
actual unemployment rate may decrease somewhat faster than the natural unemployment
rate, with the cyclical unemployment component becoming negative. This could make
businesses boost wages at a slightly faster rate.
For the first time, employment expectations of businesses have been steadily positive
over the past few years. The demand for labour in the services sectors was increasing
progressively also previously; in the middle of 2016, it grew also in manufacturing and
in the beginning of 2017 – in construction (this coincides well with the value added and
employment data for these sectors). However, no significant excess of free work force has
been observed this time (Latgale is a notable exception). High participation in the labour
market drives the unemployment rate above the EU average. The possibilities to increase
the participation rate further are limited as its rise recorded in the previous years was partly
determined by a shift in the age structure – a temporary effect that will start to reverse
already after some years. Therefore, the economic development is expected to be driven by
improved productivity, but the number of employed will remain broadly unchanged.
The share of businesses claiming labour shortage as a significant factor limiting business
activities has increased in the first half of 2017. This, along with the regional disproportion,
can still be viewed as a mismatch between supply and demand of labour skills and/
or knowledge in individual sectors rather than general labour shortage. Moreover, a
5. LABOUR MARKET

36
June 2017
similar assessment of labour shortage in the construction and services sectors was already
observed during the post-crisis period. At the same time, the improvement of the ratio in
manufacturing may partly reflect a very good performance of the sector in 2016. It should be
noted that the segment of high-skilled employees is the one mostly displaying the signs of
labour shortage.
The average remuneration data for 2016 (annual growth rate – 5%) have been revised
upwards by the CSB (Latvijas Banka's assessment of the remuneration growth was higher
already before the revision). The rise in wages accelerated somewhat at the beginning of
2017. Remuneration has slightly outpaced labour productivity over the last five years. Thus,
the labour income share in the total value added increased from 50% to 60% and approached
the EU average. This could have a negative effect on the competitiveness of businesses if
remuneration continues to outpace labour productivity.
5. LABOUR MARKET

37
June 2017
6. Costs and Prices
Oil prices
It is expected that the
average price will be 49.3
US dollars per barrel in
2017 and 52.6 US dollars
per barrel in 2018.
– The price of Brent crude oil fluctuated
between 50 US dollars and 55 US dollars
per barrel in the first months of 2017;
– the OPEC countries overall comply
with the agreement on oil output curbs of
November 2016, and Russia has also cut
oil production; the OPEC countries decided
to extend the term of the agreement on 25
May;
– the US has expanded the oil extraction
level and expressed readiness to increase it
even further.
It is projected that the
average price will be 51.1 US
dollars per barrel in 2017,
50.2 US dollars per barrel in
2018 and 49.8 US dollars per
barrel in 2019.
Global food prices
A moderate rise in global
food prices is expected in
2017.
– The global food prices continued to rise in
early 2017. Moreover, the region's prices of
fresh vegetables and fish increased due to
short-term factors;
– the global prices of dairy products,
cereals, sugar and vegetable oils decreased
in the spring of 2017, while those of meat
rose moderately.
The forecast for retail food
prices has been revised
upwards. This has been
affected by both the forecast
for the global food prices and
a revised assessment of the
transmission of the global
food prices.
Domestic labour costs and inflation expectations
In 2017, wages will
increase by 5.0%. Inflation
expectations are moderate,
reflecting low inflation
within the last four years.
– Labour costs rise slightly faster than
projected;
– inflation expectations grew at the
beginning of 2017 and stabilised in spring.
remuneration will rise by
6.0%. Inflation expectations
will remain at the same level
as in the spring of 2017.
Indirect taxes and administered prices
An increase in the excise
tax in line with the
approved levels.
– According to the PUC, the natural gas
tariff could increase by 4% or less due to
more expensive gas distribution system
services. Latvijas Banka forecasts that
the contribution to inflation could be +0.1
percentage point.
The forecast has taken
account of the possible
increase in natural gas tariffs
after the liberalisation of the
gas market.
Over the half-year, inflation rose from zero to more than 3% in the first months of 2017.
Inflation has grown on account of an increase in energy costs and higher prices of food
products, mainly reflecting trends in global markets. On 23 March, the inflation forecast for
2017 was revised upwards from 1.6% to 2.7% by the Council of Latvijas Banka. Since then
the forecasts for global oil and food prices remained broadly unchanged. However, more
robust domestic economic activity has a stronger impact on core inflation; therefore, the
inflation forecast for 2017 has been revised upwards to 2.9%.
At the beginning of May, the price of Brent crude oil fell slightly below 50 US dollars per
barrel. This is the lowest level recorded since November 2016 when the OPEC members
agreed to reduce oil production volumes with a view of raising the oil price. The OPEC
countries overall comply with the agreement; moreover, Russia also reduced oil production
volumes. However, the "bears" (the strategy of the market players to make profit by using
6. COSTS AND PRICES

38
June 2017
the stock price downslide) have been the dominant players in the oil market since mid-
March; nevertheless, the price of oil, though recording significant fluctuations, is on a
downward path. The news background is appropriate – the stocks of oil products regularly
outperform the investors' forecasts, while the US expands oil production and expresses
readiness to do it even more. The OPEC members took a decision to extend curbs on oil
output for another nine months at their meeting on 25 May. However, this did not affect
the oil price significantly as the market participants were obviously waiting for more active
action. Judging by the prices of oil futures contracts, investors do not expect a current rise in
oil prices in the medium term, and a slightly lower price of oil is projected in the market in
the second half of 2017 in comparison with November 2016. However, the actual oil price
significantly exceeded the market forecast of November 2016 in the first half of the year.
Thus, the assessment of the average oil price for 2017 has been revised upwards somewhat
as compared to the previous assessment.
The fuel price has been relatively stable since the beginning of 2017 (the price of 95 octane
petrol was 1.16–1.18 euro per litre), reflecting the oil price dynamics on the global stock
exchanges with a delay of a couple of weeks. Meanwhile, the fuel price shrank somewhat
in May (to 1.14 euro per litre). In January, natural gas tariffs for households increased
slightly, reflecting a rise in the prices of oil products in 2016. The heating season ended
with somewhat higher heating tariffs than in the previous year. The correlation between the
natural gas price and the average price of oil products of the preceding nine months means
that the heating tariff will be slightly higher than the average in the next heating season, but
the rise in tariffs – lower than could be expected some months ago. Following a two-year
period of falling prices, the people can get the wrong impression that the rise in gas (and
heating) prices is mainly related to the liberalisation of the gas market. However, according
to the PUC, the natural gas tariff could increase by 4% or less due to more expensive gas
distribution system services, and this would push up inflation by only 0.1 percentage point.
The food prices in Latvian retail shops grew rapidly at the beginning of the year, but later
stabilised. This dynamics resulted from changes in the prices of food products on the global
stock exchanges. The harvest of cereal products of 2016 was at an all-time high, and an
equally good harvest is projected for 2017. Thus, the produced volume of cereal products
6. COSTS AND PRICES

39
June 2017
could exceed the consumption rates already for the fifth consecutive year, with the stocks
of cereal products standing close to their historical high. With supply increasing, the global
prices of dairy products declined to a record low of the half-year (it should be noted that it
was the rise in the prices of dairy products that had the strongest impact on inflation growth
in Latvia if compared with all other food commodity groups).
More buoyant than projected economic activity in the country means that labour costs may
rise slightly faster than expected in 2017. Therefore, the domestic demand could have a
slightly stronger effect on inflation (inflation pressure is not currently observed) and average
inflation could increase to 2.9% in 2017.
6. COSTS AND PRICES

40
June 2017
7. Conclusions and Forecasts
At the end of 2016 and the beginning of 2017, Latvia's economic growth accelerated,
reaching 4.0%, a high of the last few years, already in the first quarter of 2017. The
acceleration was driven by improvement in manufacturing and energy, and, starting with
2017, also in construction, transportation and trade.
A number of factors point to sustained growth also in the future. The external economic
environment is gradually improving. Better economic data of foreign trade partners and the
sentiment indicators of the economic agents testify to that. Manufacturing and foreign trade
data in Latvia also suggest that external demand is on the upturn. Along with the above,
increasingly stronger recovery of lending levels persists, and the labour market sees signs of
further improvement, with moderating unemployment and a sustained rise in remuneration.
Currently there are no strong indications that at the beginning of 2017 access to the
EU structural funds, particularly essential for the construction sector, had improved
considerably. It is expected to happen later during 2017. Further increase in the availability
of EU structural funds will have a positive effect on the construction sector and its related
sectors, as well as overall investment activity.
In view of the above factors, Latvijas Banka revises upwards its GDP growth forecast for
2017. Seasonally and calendar non-adjusted data suggest that GDP is likely to grow by 3.3%
in 2017 (3.0% according to the forecast published on 23 March 2017), but the seasonally and
calendar adjusted data show that it could increase by 3.7% (3.4% according to the previous
projection). A further 3.4% rise in GDP has been forecast for 2018, according to seasonally
and calendar adjusted and non-adjusted data.
Risks related to the growth are considered to be on the upside. Although relatively high
uncertainty and concern regarding the intensification of protectionist policies is still observed
in the external environment, stronger improvement in the external environment, as well as
an accelerated increase in government expenditure and implementation of the planned tax
reform could serve as drivers of economic growth.
At this stage, no rise has been recorded either in the global oil or food prices. However, the
upward revision of the forecast of the economic activity and hence also that of remuneration
implies a potentially stronger effect of the domestic demand on inflation (i.e., core inflation).
Latvijas Banka's forecast for 2017 is 2.9% (the forecast published on 23 March 2017 was
2.7%).
7. CONCLUSIONS AND FORECASTS

41
June 2017
Table 1
GDP AND INFLATION FORECASTS AND THEIR CHANGES
(percentage points)
2017
GDP forecast (non-adjusted data; %) 3.3
Changes in GDP forecasts +0.3
incl. on account of external factors +0.1
Main factors + external demand
incl. on account of domestic factors +0.2
Main factors + more positive outlook for investment environment
Inflation forecast (%) 2.9
Changes in inflation forecasts +0.2
incl. on account of external factors –0.1
Main factors + minor fall in global food prices
incl. on account of domestic factors +0.3
Main factors + accelerated domestic economic activity; steady rise in wages
7. CONCLUSIONS AND FORECASTS

42
June 2017
8. Analysis of Scenarios
Assessment of tax reform proposal
In May 2017, the Cabinet of Ministers of the Republic of Latvia accepted "The National Tax
Policy Guidelines for 2018–2021", which the Ministry of Finance of the Republic of Latvia
(hereinafter, the Ministry of Finance) had developed in cooperation with social partners.
During the tax reform discussion, various proposals were voiced, and the World Bank and
Latvijas Banka presented their assessment and suggestions for changes in the tax policy
framework as well. Considering the diversity of the submitted proposals, their analysis is
based on economic models of Latvijas Banka, which provide for a deep insight into the
potential effects on various economic indicators.
Tax reform framework
"The Tax Strategy 20/20" developed by Latvijas Banka mostly focuses on the economic
growth, promoting competitiveness of businesses and raising the level of overall well-being
as well as curbing the shadow economy. "The Tax Strategy 20/20" provides for reforming
the tax system relative to the personal and corporate income and expanding the use of the
reverse charge of VAT. "The National Tax Policy Guidelines for 2018–2021" drafted by the
Ministry of Finance, in turn, additionally addresses inequality by including mitigating or
social support measures, which exert an extra pressure on the budget deficit and necessitate
its partial compensation by raising taxes on consumption. The World Bank's report "Latvia
Tax Review" primarily focuses on increasing the state budget revenues by raising tax rates
and improving tax collecting administration as well as reducing income inequality.
Table 2
TAX REFORM PROPOSALS OF MINISTRY OF FINANCE, WORLD BANK AND LATVIJAS
BANKA
(for 2018)
Ministry of Finance World Bank Latvijas Banka
Personal income tax (PIT)
Tax rate on
income from
wages and
salaries
–– 20%
–– 23% on income starting with
3 750 euro per month
–– 19% on income up to 360
euro per month
–– 23% on income up to
1 300 euro per month
–– 33% on income starting
with 1 300 euro per month
20%
Untaxed
monthly
minimum and
reliefs for
dependants
–– Non-taxable minimum:
differentiated 250–0 euro per month
on employee income up to
1 000 euro per month; 250 euro per
month for pensioners;
–– allowance for dependants: 250
euro per month
Tax rate on
other (capital)
income
20% 15% 20%
8. ANALYSIS OF SCENARIOS

43
June 2017
Ministry of Finance World Bank Latvijas Banka
Corporate
income tax
(CIT)
–– 0% rate on reinvested profit and
20% rate on distributed profit;
–– transition period of three years
within the framework of PIT;
–– tax rebates for large-scale
investment projects, special
economic zones and free ports;
–– untaxable donor donations from
their distributed profit in the amount
of up to 10% of total earnings
or up to 3% of social insurance
contributions.
–– Remove investment tax
relief (tax credit);
–– restrict transfer of losses.
–– Introduce 0%
rate on reinvested
profit and 20%
rate on distributed
profit;
–– remove reliefs.
Excise tax Increase tax rates, including
– on petrol by 8%;diesel fuel by
11%;
– on liquified oil gas by 12%;
– on cigarettes by 5%;
– on wine by 18%;
– on beer by 24%;
– on other alcoholic products
(preparations) and beverages by
15%.
By implementing such measures, to
achieve additional 0.2% of GDP in
budgetary tax revenues.
– Increase excise tax rates
on various goods;
– introduce amendments
to the fuel taxation system
(depending on the volume
of CO2
emissions);
– ensure a more efficient
collection of the tax
By implementing such
measures, to achieve
additional 1% of GDP in
budgetary tax revenues.
Value added
tax (VAT)
–– Expand the use of reverse VAT
(sale of household appliances,
building materials and metal
industry);
–– lower the VAT registration
threshold (to 40 thousand euro);
–– lower the transaction reporting
threshold from 1 430 euro to 150
euro.
Remove the reduced VAT
rate on heating (wood and
heat energy) and tourist
accommodation services.
Expand the use
of the reverse
VAT (applicable
to all economy
or initially
to household
equipment sale,
building materials
and metal
industry).
Micro-
enterprise
tax (MET)
Reduce the MET turnover
threshold, revisions to the MUN
wage threshold (discussions still
underway).
Gradual termination of
the MET tax regime;
introduction of start-up and
lifestyle business support
regulation.
Other
measures
Raise the minimum wage; increase
the income cap (the upper income
limit) for state social insurance
mandatory contributions and
differentiate tax rates, integrating
solidarity tax into the social
insurance system; increase the
lottery and gambling tax; restrictions
on PIT eligible expenditure;
rendering tax administration more
effective, combating the shadow
economy, etc. Additional funding
for road maintenance, social budget
expenditure, PIT loss compensation
to local governments, etc.
Combat the shadow
economy (unrecorded
wages); closing the VAT
gap (reduction of lost tax
revenues); readjustment of
property (real estate) tax
basis.
(Table 2 cont.)

44
June 2017
Fiscal impact
Proposals of "The Tax Strategy 20/20" developed by Latvijas Banka make up the core of
the tax reform, with a relatively small negative fiscal impact in 2018. In contrast, by easing
the transitional provisions of the corporate income tax reform and supplementing the core
proposals with the social support measures, the negative fiscal impact of the proposals of the
Ministry of Finance becomes more pronounced. Moreover, according to Latvijas Banka, too
slow an expansion of the reverse VAT charge procedure in the proposal of the Ministry of
Finance is likely to hamper revenue growth. The feedback loop of the accelerating economic
activity might also be slightly overestimated, given the negative impact of raising the excise
tax on the economy. Consequently, fiscal risks to "The National Tax Policy Guidelines for
2018–2021" could be slightly on the downside.
As regards the World Bank's proposals, they are fiscally positive already in the first year
of the reform, corresponding to the set task. According to them, the major contribution
results from changes in the excise tax and a decline in the shadow economy. At the same
time it should be noted that the obtained outcome is based on over-optimistic assumptions
regarding the spread of the cross-border illegal trade and effective tax collection (i.e., the
World Bank assumes that Latvia will be able to ensure a rapid fall in smuggling levels
despite an increase in excise tax rates), as well as agreement of fuel taxes in the Baltic
States. Consequently, by implementing the World Bank's proposals, the rise in tax revenue is
highly likely to be lower than estimated.
Table 3
IMPACT OF THE PROPOSALS OF THE MINISTRY OF FINANCE, WORLD BANK AND
LATVIJAS BANKA ON THE STATE BUDGET IN 2018
(% of GDP; estimates of the respective institutions)
Proposals of the
Ministry of Finance
Proposals of the
World Bank
Proposals of
Latvijas Banka
TOTAL –0.7 3.1 –0.3
PIT –0.6 0.4 –0.3
Remuneration rate –0.3 0.3 –0.3
Untaxed minimum and
reliefs for dependants
–0.4
Rate equalization 0.1 0.1 (the proposal effect
is expected in 2019)
CIT –0.7 0.7 –0.3
Excise tax 0.2 1.0
VAT 0.3 0.1 0.2
Expansion of the reverse VAT
application
0.2 0.2
Other VAT measures 0.1
MET 0.2
Other measures (net) 0.1 0.7
Macroeconomic impact
Estimating the effect of the tax reform proposals on the economy in the medium term, the
scenarios show the impact of Latvijas Banka's proposals as per "The Tax Strategy 20/20"
estimates, and an additional assessment for "The National Tax Policy Guidelines for
2018–2021" has been modelled, using the macroeconomic models at the disposal of Latvijas

45
June 2017
Banka. For the first time the effect of the World Bank's proposals on the economic growth
has been assessed as the report "Latvia Tax Review", developed by the World Bank, does
not cover that.
The proposals of Latvijas Banka and the Ministry of Finance on the labour tax reforms
would result in an increase in real disposable income of households and their spending.
Higher private consumption simultaneously promotes demand for investment and imports.
In order to satisfy the demand for goods and services, a larger number of employees is
required; that implies not only employment growth, but also an upward pressure on wages
and prices. At the same time, by implementing a corporate income tax reform, i.e., not
imposing tax on profit invested in development, corporate financial indicators improve.
Thus, there are more opportunities to attract capital, while its costs decrease: upon leaving
the shadow economy, with better financial indicators and disclosure of the true financial
status the companies can attract capital on better terms and conditions. Consequently, both
tax reform proposals – changes in CIT and PIT – have a positive effect on the economic
growth and employment, at the same time affecting the rise in wages and price levels.
However, the offsetting measures offered under "The National Tax Policy Guidelines
for 2018–2021", e.g. a rise in excise tax, increase production costs and hence reduce
employment and economic growth (–0.4% in cumulative terms in 2020), as well as raise the
price level. Therefore, the analysis of scenarios of "The National Tax Policy Guidelines for
2018–2021" points to a still positive, but potentially overestimated macroeconomic impact
in 2020.
As to the changes in CIT proposed by the World Bank, lifting the major tax reliefs raises the
effective tax rate, thus increasing the capital costs by 0.25%. Along with a higher tax rate
on labour remuneration, by setting a relatively low threshold for the progressive PIT (33%,
starting from 1 300 euro per month), and a rise in excise tax, the economic growth would be
held back considerably.
Table 4
CHANGES IN KEY MACROECONOMIC INDICATORS IN 2020 AS A RESULT OF
PROPOSALS OF THE MINISTRY OF FINANCE, WORLD BANK AND LATVIJAS BANKA;
ASSESSMENT OF LATVIJAS BANKA
(in cumulative terms in 2020; % against the baseline scenario)
Proposals of the
Ministry of Finance
Proposals of the
World Bank
Proposals of
Latvijas Banka
Impact on the real GDP 2.2 –1.2 2.4
Impact on inflation 0.8 0.3 0.2
Impact on employment 0.8 –1.0 1.2
Impact on consumption 1.4 –2.4 0.8
Conclusions
Analysis of scenarios shows that the positive fiscal effect of the World Bank's proposal
has been overestimated. It results both from the too optimistic view on the possibilities to
rapidly reduce the evasion of taxes and the dramatically negative effect of the proposals on
the economic indicators that is not taken into account when estimating the fiscal benefits.
On the other hand, given the negative feedback loop of the offsetting measures on the
economic indicators, the macroeconomic impact of "The National Tax Policy Guidelines
for 2018–2021" is also likely to be overestimated; nevertheless, it is still positive and the
overall effect of the proposals incorporated therein is more favourable for the economic
development than the proposal of the World Bank. However, more gradual implementation
of the social block proposals should be considered: that would reduce both the fiscal tension

46
June 2017
and the need for such offsetting measures as raising the excise tax which has a substantial
negative impact on the economic growth.
As to "The Tax Strategy 20/20", its proposals provide for a less pronounced decrease in
budgetary revenue than those of "The National Tax Policy Guidelines for 2018–2021",
resulting in potentially better macroeconomic indicators.
Models used in scenario simulations
The scenario impact has been modelled mostly by using the computable general equilibrium
(CGE) model, capturing 32 industries, 55 products and seven categories of final users. On
the fiscal side, it comprises five government expenditure types and five revenue sources,
including such four major taxes as the PIT, state social insurance mandatory contributions
(SSIMC), VAT, and excise tax. Shadow economy, the size of which depends on the level
of tax rates and economic activity, is also analysed. These features of the model allow
us to obtain rich and detailed conclusions about the effect of several fiscal measures on
Latvia's economy, both in aggregate and by sector. For further information, see Beņkovskis,
Konstantīns, Goluzins, Eduards, Tkačevs, Oļegs. CGE model with fiscal sector for Latvia.
Riga: Latvijas Banka, 2016. Working Paper 1/2016.
As regards the impact of changes in the CIT, it has been modelled by using Latvia's
estimated dynamic stochastic general equilibrium (DSGE) model with financial frictions and
incorporating the unemployment parameter in the model. For further information, see Bušs,
Ginters. Search-and-Matching Frictions and Labour Market Dynamics in Latvia. Riga:
Latvijas Banka, 2015. Working Paper 4/2015.

47
June 2017
Statistics
List of tables
1. Monetary Indicators and Interest Rates 49
2.ab Real Sector Indicators and Prices 50
3. Analytical Accounts of the Central Bank 51
4. Monetary Aggregates and Counterparts in the Euro Area: Latvian Contribution 52
5. Key ECB Interest Rates 53
6. Assets and Liabilities of Latvijas Banka 54
7. Aggregated Balance Sheet of MFIs (excluding Latvijas Banka) 56
8. Consolidated Balance Sheet of MFIs 57
9.ab Aggregated Balance Sheet of MFIs (excluding Latvijas Banka) 58
10. Monetary Survey MFI's (excluding Latvijas Banka) 61
11.ab Foreign Assets and Liabilities of MFIs (excluding Latvijas Banka) 62
12. Selected Items in the Monthly Financial Position Report of MFIs (excluding
Latvijas Banka) by Group of Countries 63
13. Maturity Profile of Deposits of Resident Financial Institutions, Non-Financial
Corporations and Households 64
14.a Deposits by Financial Institutions 65
14.b Deposits by Non-Financial Corporations 67
14.c Deposits by Households 68
14.d Deposits by Government and Non-Residents 68
15. Maturity Profile of Loans to Resident Financial Institutions, Non-Financial
Corporations and Households 69
16.a Loans to Financial Institutions and Non-Financial Corporations 70
16.b Loans to Households 71
16.c Loans to Government and Non-Residents 71
17.ab Loans to Financial Institutions and Non-Financial Corporations in the National
Economy 71
18. Lending to Resident Financial Institutions, Non-Financial Corporations and
Households 73
19.a Holdings of Securities Other than Shares 74
19.b Holdings of Shares and Other Equity 74
20.a Currency Breakdown of Resident Deposits 75
20.b Currency Breakdown of Non-Resident Deposits 75
20.c Currency Breakdown of Loans to Residents 76
20.d Currency Breakdown of Loans to Non-Residents 76
20.e Currency Breakdown of Holdings of Resident Securities Other than Shares 77
20.f Currency Breakdown of Holdings of Non-Resident Securities Other than
Shares 76
20.g Currency Breakdown of Debt Securities Issued by MFIs 77
21.a Weighted Average Interest Rates Charged by MFIs in Transactions with
Resident Non-Financial Corporations and Households in Euro 77
21.b Weighted Average Interest Rates Charged by MFIs in Transactions with
Resident Non-Financial Corporations and Households in US Dollars 82
21.c Weighted Average Interest Rates Charged by MFIs in Transactions with Resident
Non-Financial Corporations (new business) 86
22. Lending in the Interbank Markets 87
23. Interest Rates in the Domestic Interbank Market 88
24. Principal Foreign Exchange Transactions (by type, counterparty and currency) 88
STATISTICS

48
June 2017
25. Non-cash Foreign Exchange Transactions 89
26. Euro Foreign Exchange Reference Rates Published by the ECB 89
27. Weighted Average Exchange Rates (cash transactions) 90
28. Structure of Government Securities 91
29. Auctions of Government Securities in the Primary Market 92
30. Dynamics of GDP 92
31. Changes in the Average Monthly Wages and Salaries and Unemployment 93
32. Latvian Foreign Trade Balance 93
33. Main Export Goods of Latvia 94
34. Main Import Goods of Latvia 94
35. Latvian Foreign Trade Partners 95
36. Convenience and Extended Credit, Revolving Loans and Overdraft to Resident
Non-financial Corporations and Households 95
37.a Loans to Resident Non-financial Corporations in the Breakdown
by Residual Maturity and by Interest Rate Reset Period 96
37.b Loans to Resident Households in the Breakdown by Residual Maturity and
by Interest Rate Reset Period 96
38. Volumes of new business and renegotiated loans in euro in MFI transactions
with resident non-financial corporations and households 97
39. Latvia's Balance of Payments 98
STATISTICS

49
MONETARY INDICATORS AND INTEREST RATES
2016 2017
Q1 Q2 Q3 Q4 Q1
Overnight deposits1
(Latvian
contribution to the euro area M1) 7.4 12.7 16.5 11.1 7.4 8.2
Latvian contribution to the euro
area M21 7.0 9.9 12.0 9.3 7.0 6.0
area M31 6.9 9.5 11.6 9.0 6.9 6.1
Loans to resident financial
institutions, non-financial
corporations and households1
3.0 –0.6 1.4 2.0 3.0 2.8
Deposits of resident financial
7.7 10.9 12.4 9.7 7.7 4.7
Long-term interest rate for
convergence assessment purposes2
0.53 0.88 0.53 0.17 0.55 0.94
EURIBOR (3-month loans)3
–0.264 –0.187 –0.258 –0.298 –0.312 –0.328
Weighted average yield on
government bonds 0.34
0.34
0.44
0.14
–0.045
0.24
OMXR3
656.4 612.9 629.5 655.5 726.3 753.0
1.
2016 2017
I II III IV V VI VII VIII IX X XI XII I II III
Overnight deposits1
(Latvian
contribution to the euro area M1)
13.3 14.7 12.7 14.6 14.4 16.5 13.1 13.4 11.1 11.9 9.5 7.4 6.4 6.3 8.2
area M21 9.7 10.7 9.9 11.0 10.9 12.0 10.1 10.7 9.3 9.5 8.5 7.0 5.9 5.0 6.0
area M31 9.7 10.4 9.5 10.5 10.5 11.6 9.7 10.3 9.0 9.3 8.3 6.9 6.1 4.9 6.1
Loans to resident financial
–2.3 –1.9 –0.6 0.1 0.9 1.4 1.8 1.7 2.0 1.8 2.3 3.0 3.8 3.8 2.8
Deposits of resident financial
10.3 11.9 10.9 11.7 12.5 12.4 9.7 10.3 9.7 9.5 8.1 7.7 6.0 4.7 4.7
Long-term interest rate for
convergence assessment purposes2
1.05 0.88 0.71 0.61 0.51 0.48 0.30 0.12 0.10 0.19 0.56 0.90 0.89 0.99 0.94
EURIBOR (3-month loans)3
–0.146 –0.185 –0.230 –0.249 –0.257 –0.268 –0.294 –0.298 –0.302 –0.309 –0.313 –0.316 –0.325 –0.329 –0.329
Weighted average yield on
government bonds – 0.15
0.34
0.15
0.44
0.045
– 0.0055
0.14
–0.15
– –0.025
–0.035
– 0.24
OMXR3
598.0 615.7 624.3 621.5 633.4 634.1 633.6 638.3 694.4 717.2 725.3 736.2 742.6 745.8 769.3
1
Year-on-year changes (%).
2
Average secondary market yield of 10-year government bonds.
3
Average of the period.
4
Weighted average primary market yield of 5-year government bonds.
5
Weighted average primary market yield of 3-year government bonds.

50
REAL SECTOR INDICATORS AND PRICES
2016 2017
Q1 Q2 Q3 Q4 Q1
Industrial output1, 2
Increase/decrease3
(at constant
prices; working day adjusted data; %) 5.0 2.0 4.6 3.7 9.3 6.7
Cargoes loaded and unloaded at ports
Turnover (thousands of tons) 63 116 17 013 14 743 14 168 17 192 18 491
Increase/decrease3
(%) –9.3 –14.1 –16.3 –7.3 2.0 8.7
Retail trade turnover 1, 2, 3
Turnover (at current prices; millions of euro) 6 706.4 1 487.2 1 685.8 1 757.6 1 775.8 1 596.1
Increase/decrease3
(at constant prices; %) 2.5 2.5 2.6 1.5 2.6 2.0
Unemployment rate (%) 8.4 9.1 8.3 7.9 8.4 8.3
Producer prices1
(increase/decrease compared with the
previous period; %) –2.4 –1.0 –0.8 0.4 0.2 1.4
Consumer price inflation (HICP)
Year-on-year basis (%) 0.1 –0.5 –0.7 0.2 1.5 3.1
Quarter-on-quarter basis (%) x –0.6 1.5 –0.3 0.9 1.0
Financial surplus/deficit in the consolidated general government budget
Surplus/deficit (millions of euro) –101.7 48.4 137.8 117.4 –405.3 99.8
Ratio to GDP (%) 0.4 0.9 2.2 1.8 6.0 1.7
1
Data are calculated according to the Statistical classification of economic activities in the European Community (NACE Rev. 2).
2
Data have been revised.
3
Year-on-year basis.
4
Sale of motor vehicles and motorcycles not included.
2.a

51
ANALYTICAL ACCOUNTS OF THE CENTRAL BANK
(at end of period; millions of euro)
2016 2017
Latvia's contribution to the euro
area monetary base 8 079.6 8 249.6 7 678.8 7 924.0 7 868.5 7 251.1 7 887.5 7 810.6 8 122.5 8 446.8 8 507.6 8 453.7 8 109.5 8 201.1 8 020.7
Currency in circulation 4 103.3 4 104.6 4 132.8 4 142.2 4 156.3 4 191.1 4 231.2 4 217.5 4 229.7 4 250.2 4 256.3 4 262.6 4 199.3 4 206.7 4 217.5
Current accounts (covering
the minimum reserve system) 3 976.3 4 145.0 3 546.0 3 781.8 3 712.2 3 060.0 3 656.3 3 593.1 3 892.8 4 196.6 4 251.3 4 191.1 3 910.2 3 994.4 3 803.2
Deposit facility and other
liabilities related to monetary
policy operations 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Credit 4 155.2 4 776.3 5 062.1 5 337.6 5 615.2 5 882.5 6 144.2 6 308.0 6 388.7 6 647.3 6 839.0 6 944.3 7 059.7 6 741.2 7 011.0
To MFIs in the euro area 739.3 741.3 629.4 663.8 687.8 679.0 694.7 690.8 528.2 572.6 607.0 548.0 520.8 530.2 523.2
To the general government
sector in the euro area 1 312.1 1 724.7 1 973.3 1 981.2 2 015.0 2 063.7 2 092.8 2 124.2 2 270.1 2 289.9 2 254.1 2 270.5 2 242.4 1 698.1 1 746.0
To other euro area residents 2 103.8 2 310.3 2 459.4 2 692.6 2 912.4 3 139.8 3 356.7 3 493.0 3 590.4 3 784.8 3 977.9 4 125.8 4 296.5 4 512.9 4 741.8
Foreign assets outside the euro
area 3 451.3 3 494.5 3 246.5 3 294.3 3 350.0 3 344.4 3 123.9 3 119.8 3 475.1 3 496.3 3 540.3 3 470.9 3 416.7 3 540.9 3 459.5
Foreign liabilities outside the
euro area 1.8 3.8 9.8 4.6 1.1 9.7 1.4 3.3 3.9 3.8 1.1 17.9 6.6 1.1 9.1
REAL SECTOR INDICATORS AND PRICES
2016 2017
Industrial output1, 2
Increase/decrease3
(at constant prices;
working day adjusted data; %) –2.4 4.3 3.8 0.3 5.4 8.2 3.3 2.4 5.6 7.3 9.1 11.6 7.8 4.9 7.4
Cargoes loaded and unloaded at ports
Turnover (thousands of tons) 5 688 5 625 5 700 5 194 5 202 4 347 4 880 4 468 4 820 5 769 5 257 6 166 6 449 5 503 6 538
Increase/decrease3
(%) –14.5 –9.1 –18.2 –19.5 –7.3 –21.5 –3.2 –11.0 –7.8 1.1 –4.7 9.3 13.4 –2.2 14.7
Retail trade turnover 1, 2, 3
Turnover (at current prices;
millions of euro) 489.8 473.7 523.7 544.0 569.1 572.8 594.6 599.1 563.9 574.5 552.0 649.2 530.8 498.6 566.7
Increase/decrease3
(at constant
prices; %) 3.4 3.1 1.2 2.1 3.9 1.9 2.0 1.4 1.1 0.5 5.1 2.4 3.7 0.9 1.5
Unemployment rate (%) 9.1 9.2 9.1 8.8 8.4 8.3 8.3 8.1 7.9 7.9 8.0 8.4 8.5 8.4 8.3
Producer prices1
(increase/decrease
compared with the previous period; %) –0.2 –0.9 –0.5 –0.1 –0.2 0.2 –0.1 0.6 0.3 –0.4 0.3 0.4 0.7 0.4 0.1
Consumer price inflation (HICP)
Year-on-year basis (%) –0.3 –0.6 –0.6 –0.7 –0.8 –0.6 0.1 –0.1 0.5 1.1 1.2 2.1 2.9 3.2 3.3
Month-on-month basis (%) –0.7 0.1 0.8 0.4 0.7 0.1 –0.3 –0.7 0.4 0.6 0.1 0.6 0.1 0.4 0.9
Annual core inflation (total HICP
excluding fuel, regulated and
unprocessed food prices; %) 0.7 0.8 1.1 1.0 1.2 1.0 1.7 1.2 1.4 1.7 1.8 2.2 2.4 2.3 2.6
Financial surplus/deficit in the
consolidated general government
budget (millions of euro) 107.1 41.8 –100.5 –9.1 149.3 –2.4 21.4 42.0 54.0 –67.5 –95.8 –242.0 121.8 11.0 –33.0
1
Data are calculated according to the Statistical classification of economic activities in the European Community (NACE Rev. 2).
2
3
Year-on-year basis.
4
Sale of motor vehicles and motorcycles not included.
2.b
3.

52
MONETARY AGGREGATES AND COUNTERPARTS IN THE EURO AREA: LATVIAN CONTRIBUTION
2016 2017
Monetary aggregates: Latvian contribution
M3 11 427.3 11 723.7 11 636.9 11 814.5 11 796.5 11 932.1 11 863.7 11 973.3 11 989.1 12 030.9 12 234.1 12 375.6 12 128.2 12 303.5 12 345.9
Repurchase
agreements 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Money market fund
shares and units 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Debt securities issued
with maturity of up to
2 years 53.6 44.4 28.8 14.7 18.8 12.5 22.9 31.5 42.0 35.4 36.6 67.8 80.2 40.9 46.5
Deposits with agreed
maturity of up to
2 years 1 228.0 1 238.3 1 320.9 1 304.1 1 229.2 1 219.6 1 233.7 1 231.7 1 237.9 1 245.8 1 303.4 1 285.2 1 225.7 1 153.5 1 143.0
Deposits redeemable at
notice of up to
3 months 801.9 826.4 790.1 801.5 802.8 809.2 813.7 820.3 830.1 842.0 855.7 864.1 884.7 893.1 881.2
Overnight deposits 9 343.8 9 614.6 9 497.2 9 694.1 9 745.7 9 890.7 9 793.4 9 889.8 9 879.1 9 907.6 10 038.5 10 158.5 9 937.6 10 216.0 10 275.3
Counterparts of monetary aggregates and longer-term financial liabilities: Latvian contribution
Deposits of central
government 459.4 537.9 508.1 469.7 919.5 897.4 662.5 735.5 826.1 1 263.3 1 206.0 1 042.7 1 105.3 1 096.9 925.2
Longer-term financial
liabilities 4 381.2 4 405.0 4 164.8 4 126.3 3 766.4 3 865.7 3 923.7 3 961.9 3 994.7 3 973.8 3 888.9 3 924.7 3 897.7 3 921.4 3 846.4
Deposits with agreed
maturity of over
2 years 428.2 422.2 408.2 411.2 411.0 410.3 411.9 405.9 405.3 406.9 368.6 365.6 321.0 320.2 317.2
notice of over
3 months 4.8 4.8 4.9 4.9 5.0 4.8 4.7 4.6 4.5 4.3 4.5 4.5 4.4 8.4 8.3
with maturity of over
2 years 46.8 32.8 30.8 34.8 35.6 37.7 37.9 38.5 38.9 39.5 40.2 95.3 110.2 111.0 111.5
Capital and reserves 3 901.3 3 945.2 3 720.9 3 675.3 3 314.8 3 413.0 3 469.2 3 512.9 3 546.0 3 523.0 3 475.6 3 459.3 3 462.1 3 481.8 3 409.4
Credit to euro area
residents 16 410.4 16 770.0 17 177.9 17 306.8 17 441.3 17 751.9 17 642.7 17 660.9 17 893.8 17 950.4 18 010.2 18 049.1 17 994.9 17 193.1 17 313.0
Credit to general
government 2 779.0 3 091.3 3 397.5 3 408.7 3 386.5 3 606.1 3 472.5 3 460.0 3 691.8 3 765.4 3 762.1 3 786.2 3 719.7 2 919.1 3 009.5
Credit to other euro
area residents 13 631.5 13 678.7 13 780.5 13 898.2 14 054.8 14 145.8 14 170.1 14 200.8 14 202.0 14 185.1 14 248.1 14 262.8 14 275.2 14 274.0 14 303.5
Loans 12 846.6 12 869.9 12 992.6 13 112.7 13 271.2 13 357.0 13 388.1 13 425.4 13 443.3 13 423.4 13 483.9 13 481.9 13 489.9 13 482.8 13 527.1
Net external assets
outside euro area –1 549.9 –1 253.2 –1 228.7 –1 358.2 –1 289.4 –1 172.1 –1 704.7 –1 454.4 –1 134.0 –1 125.5 –1 195.2 –895.3 –929.3 –383.9 –595.6
4.

53
KEY ECB INTEREST RATES
(percentages per annum)
With effect from
(dd.mm.yyyy)
Deposit facility Main refinancing operations Marginal lending facility
Fixed rate tenders Variable rate tenders
Fixed rate Minimum bid rate
01.01.1999 2.00 3.00 – 4.50
04.01.1999 2.75 3.00 – 3.25
22.01.1999 2.00 3.00 – 4.50
09.04.1999 1.50 2.50 – 3.50
05.11.1999 2.00 3.00 – 4.00
04.02.2000 2.25 3.25 – 4.25
17.03.2000 2.50 3.50 – 4.50
28.04.2000 2.75 3.75 – 4.75
09.06.2000 3.25 4.25 – 5.25
28.06.2000 3.25 – 4.25 5.25
01.09.2000 3.50 – 4.50 5.50
06.10.2000 3.75 – 4.75 5.75
11.05.2001 3.50 – 4.50 5.50
31.08.2001 3.25 – 4.25 5.25
18.09.2001 2.75 – 3.75 4.75
09.11.2001 2.25 – 3.25 4.25
06.12.2002 1.75 – 2.75 3.75
07.03.2003 1.50 – 2.50 3.50
06.06.2003 1.00 – 2.00 3.00
06.12.2005 1.25 – 2.25 3.25
08.03.2006 1.50 – 2.50 3.50
15.06.2006 1.75 – 2.75 3.75
09.08.2006 2.00 – 3.00 4.00
11.10.2006 2.25 – 3.25 4.25
13.12.2006 2.50 – 3.50 4.50
14.03.2007 2.75 – 3.75 4.75
13.06.2007 3.00 – 4.00 5.00
09.07.2008 3.25 – 4.25 5.25
08.10.2008 2.75 – – 4.75
09.10.2008 3.25 – – 4.25
15.10.2008 3.25 3.75 – 4.25
12.11.2008 2.75 3.25 – 3.75
10.12.2008 2.00 2.50 – 3.00
21.01.2009 1.00 2.00 – 3.00
11.03.2009 0.50 1.50 – 2.50
08.04.2009 0.25 1.25 – 2.25
13.05.2009 0.25 1.00 – 1.75
13.04.2011 0.50 1.25 – 2.00
13.07.2011 0.75 1.50 – 2.25
09.11.2011 0.50 1.25 – 2.00
14.12.2011 0.25 1.00 – 1.75
11.07.2012 0.00 0.75 – 1.50
08.05.2013 0.00 0.50 – 1.00
13.11.2013 0.00 0.25 – 0.75
11.06.2014 –0.10 0.15 – 0.40
10.09.2014 –0.20 0.05 – 0.30
09.12.2015 –0.30 0.05 – 0.30
16.03.2016 –0.40 0.00 – 0.25
5.

54
ASSETS AND LIABILITIES OF LATVIJAS BANKA
2016 2017
ASSETS
Gold and gold
receivables 218.1 240.5 231.3 238.6 232.0 253.4 256.2 251.8 253.1 248.0 237.8 234.3 239.0 252.5 247.9
Claims on non-euro area
residents denominated
in foreign currency 3 068.1 3 076.1 2 853.7 2 890.3 2 936.9 2 903.4 2 690.4 2 705.0 2 471.6 3 101.2 3 150.2 3 092.1 3 058.9 3 158.4 3 101.3
Claims on euro area
in foreign currency 567.0 634.8 499.2 523.8 544.4 551.2 577.6 577.5 364.7 400.7 407.9 358.8 299.7 310.3 326.0
Claims on non-euro area
in euro 165.0 177.9 161.4 165.4 181.1 187.7 177.3 163.0 750.5 147.1 152.4 144.6 118.7 130.0 110.3
Lending to euro area
credit institutions related
to monetary policy
operations denominated
in euro 253.7 245.0 245.0 245.0 245.0 234.3 234.3 234.3 244.7 244.7 244.7 257.2 257.2 244.7 244.7
Main refinancing
operations 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Longer-term
refinancing operations 253.7 245.0 245.0 245.0 245.0 234.3 234.3 234.3 244.7 244.7 244.7 257.2 257.2 244.7 244.7
Fine-tuning reverse
operations 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Structural reverse
operations 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Marginal lending
facility
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Credits related to
margin calls
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Other claims on euro
area credit institutions
denominated in euro 1.2 8.9 0.1 6.6 14.1 11.8 9.4 1.6 0.5 11.6 22.2 9.1 0.0 9.7 0.1
Securities of euro area
in euro 3 333.4 3 887.7 4 317.8 4 562.2 4 811.8 5 085.3 5 323.0 5 494.6 5 778.8 5 990.4 6 164.2 6 319.8 6 502.8 6 176.6 6 440.3
Securities held for
monetary policy
purposes 2 000.4 2 194.0 2 375.7 2 641.2 2 891.7 3 130.5 3 341.9 3 523.6 3 732.9 3 989.9 4 202.9 4 357.3 4 586.6 4 823.8 5 075.2
Other securities 1 333.0 1 693.7 1 942.1 1 921.0 1 920.0 1 954.8 1 981.2 1 971.0 2 045.9 2 000.5 1 961.2 1 962.4 1 916.2 1 352.8 1 365.1
Intra-Eurosystem claims 3 765.9 3 793.5 3 844.6 3 892.3 3 916.1 3 955.1 3 996.9 4 039.4 4 061.0 4 107.3 4 119.8 4 195.9 4 177.4 4 196.0 4 221.1
Other assets 144.2 138.1 211.1 138.1 129.8 151.5 144.5 144.8 145.2 137.8 145.5 160.1 203.4 144.6 162.3
Total assets 11 516.7 12 202.4 12 364.3 12 662.3 13 011.1 13 333.7 13 409.5 13 611.9 14 070.1 14 388.7 14 644.6 14 771.8 14 857.1 14 622.7 14 853.9
6.

55
ASSETS AND LIABILITIES OF LATVIJAS BANKA (CONT.)
2016 2017
LIABILITIES
Banknotes in circulation 3 915.7 3 917.9 3 946.5 3 956.2 3 969.9 4 004.0 4 042.3 4 028.3 4 039.7 4 060.0 4 064.7 4 150.1 4 087.0 4 094.2 4 106.8
Liabilities to euro area
credit institutions related
to monetary policy
operations denominated
in euro 3 976.3 4 145.0 3 546.0 3 781.8 3 712.2 3 060.0 3 656.3 3 593.1 3 892.8 4 196.6 4 251.3 4 191.1 3 910.2 3 994.4 3 803.2
Current accounts
(covering the
minimum reserve
system) 3 976.3 4 145.0 3 546.0 3 781.8 3 712.2 3 060.0 3 656.3 3 593.1 3 892.8 4 196.6 4 251.3 4 191.1 3 910.2 3 994.4 3 803.2
Deposit facility 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Fixed-term deposits 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Fine-tuning reverse
operations 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Deposits related to
margin calls 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Other liabilities to euro
area credit institutions
Liabilities to other euro
area residents
General government 23.5 11.1 10.1 12.8 60.3 68.4 9.7 6.3 10.3 9.8 12.5 46.7 10.9 55.7 23.7
Other liabilities 114.1 118.0 97.4 102.5 101.7 114.0 169.4 168.7 161.6 167.1 166.3 165.5 170.7 170.0 169.2
Liabilities to non-euro
area residents
Liabilities to euro area
residents denominated in
foreign currency 155.3 158.1 152.5 151.0 155.1 152.3 152.3 151.4 154.1 158.2 165.1 159.8 155.9 163.9 160.3
Liabilities to non-euro
area residents
denominated in foreign
currency 0.0 0.0 0.9 0.0 0.0 2.5 0.0 1.3 0.2 0.0 0.0 0.0 0.1 0.0 0.4
Intra-Eurosystem
liabilities 2 600.0 3 032.1 3 827.1 3 880.8 4 197.0 5 067.2 4 540.5 4 803.6 4 947.8 4 945.7 5 154.2 5 292.4 5 830.1 5 399.8 5 860.5
Other liabilities 255.6 310.5 250.8 279.4 309.5 288.8 252.5 267.1 259.2 311.8 364.5 294.1 272.5 298.0 273.9
Capital and reserves 473.0 504.8 517.1 493.3 504.3 557.0 585.1 589.7 599.6 535.7 464.9 453.4 407.2 445.6 441.4
Total liabilities 11 516.7 12 202.4 12 364.3 12 662.3 13 011.1 13 333.7 13 409.5 13 611.9 14 070.1 14 388.7 14 644.6 14 771.8 14 857.1 14 622.7 14 853.9
6.

56
AGGREGATED BALANCE SHEET OF MFIs (EXCLUDING LATVIJAS BANKA)
2016 2017
ASSETS
Loans to euro area
residents 19 032.2 19 150.9 18 502.6 18 819.1 18 747.5 18 661.1 19 037.4 18 728.0 18 826.6 19 333.4 19 433.1 19 002.1 18 992.2 19 008.5 18 897.1
Other residents 12 846.6 12 869.9 12 992.6 13 112.7 13 271.2 13 357.0 13 388.1 13 425.4 13 443.3 13 423.4 13 483.9 13 481.9 13 489.9 13 482.8 13 527.1
MFIs 6 058.5 6 154.9 5 385.2 5 582.7 5 356.4 5 187.2 5 534.0 5 187.3 5 268.4 5 800.6 5 836.5 5 411.3 5 391.2 5 414.2 5 259.4
Holdings of securities
other than shares
issued by euro area
residents 2 153.3 2 092.2 2 128.8 2 159.7 2 116.1 2 261.7 2 085.6 2 040.6 2 164.3 2 162.5 2 173.3 2 212.9 2 156.3 1 885.0 1 905.1
General government 1 339.7 1 240.5 1 299.4 1 303.7 1 251.5 1 425.4 1 264.4 1 220.5 1 306.8 1 366.2 1 395.3 1 406.9 1 366.3 1 109.4 1 152.9
Other residents 138.5 156.5 159.4 157.1 152.6 156.4 155.6 141.5 138.2 139.7 141.2 143.8 142.1 147.5 144.6
MFIs 675.1 695.2 670.1 698.9 711.9 679.9 665.6 678.6 719.3 656.7 636.8 662.2 647.9 628.1 607.7
Holdings of money
market fund shares or
units issued by euro
area residents 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Holdings of shares/
other equity issued by
euro area residents 715.4 721.4 697.6 697.5 700.1 701.5 695.5 703.0 689.6 691.0 692.0 705.9 712.0 712.6 700.7
External1
assets 8 817.3 8 727.3 8 399.9 7 797.3 7 742.1 7 767.4 7 178.7 7 343.0 6 835.5 6 846.6 6 651.6 6 454.1 6 484.9 6 752.6 6 562.5
Fixed assets 166.9 169.6 167.6 167.3 168.1 168.7 168.8 169.1 176.6 176.6 176.1 176.4 175.8 176.8 177.2
Remaining assets 973.3 1 019.2 982.0 915.5 974.2 899.1 885.1 825.8 843.3 913.0 903.0 876.7 906.2 797.1 782.3
Total assets 31 858.3 31 880.6 30 878.5 30 556.4 30 448.1 30 459.6 30 051.1 29 809.6 29 535.9 30 123.2 30 029.1 29 428.1 29 427.5 29 332.5 29 024.9
LIABILITIES
Currency in
circulation x x x x x x x x x x x x x x x
Deposits of euro area
residents 12 913.8 13 283.3 13 130.7 13 304.1 13 539.2 13 730.4 13 543.5 13 438.6 13 648.1 14 088.5 14 077.1 14 021.1 13 961.8 14 061.5 13 925.3
Central government 280.6 368.8 345.5 305.9 704.1 676.7 500.5 577.8 661.7 1 095.4 1 028.4 836.1 938.5 877.2 741.2
Other residents 11 692.8 11 988.3 11 923.9 12 113.4 12 092.0 12 220.7 12 088.1 12 183.6 12 195.2 12 239.6 12 404.3 12 512.3 12 202.8 12 421.2 12 455.7
MFIs 940.4 926.2 861.4 884.7 743.1 833.0 954.9 677.2 791.2 753.5 644.4 672.7 820.5 763.1 728.4
Money market fund
shares or units held by
euro area residents 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
with a maturity of
over 2 years held by
euro area residents 45.8 32.9 30.5 34.6 35.4 37.4 38.0 38.4 38.7 39.5 40.2 96.3 112.5 113.6 114.0
External1
liabilities 13 817.8 13 470.9 12 865.4 12 445.0 12 380.3 12 274.3 12 005.5 11 913.6 11 440.5 11 464.2 11 385.9 10 801.2 10 821.9 10 673.3 10 605.7
Remaining liabilities 1 652.7 1 653.0 1 648.1 1 590.7 1 682.7 1 561.5 1 580.0 1 495.8 1 462.1 1 543.7 1 515.1 1 503.4 1 476.5 1 448.0 1 411.8
1
Non-euro area countries.
7.

57
CONSOLIDATED BALANCE SHEET OF MFIs
2016 2017
ASSETS
Loans to residents 12 400.2 12 390.8 12 524.6 12 583.8 12 731.2 12 746.9 12 768.0 12 798.8 12 819.3 12 800.0 12 853.2 12 818.7 12 846.5 12 847.7 12 862.5
Other residents 12 273.1 12 264.8 12 399.8 12 460.1 12 611.2 12 629.9 12 652.7 12 683.5 12 704.5 12 690.7 12 740.6 12 709.9 12 735.4 12 736.2 12 752.0
Holdings of securities
other than shares
issued by other
residents 1 416.7 1 446.2 1 505.3 1 556.2 1 597.4 1 633.1 1 468.6 1 518.6 1 546.6 1 660.5 1 709.1 1 753.7 1 766.2 1 550.1 1 620.3
General government 1 396.1 1 425.7 1 484.8 1 533.7 1 575.1 1 611.0 1 446.2 1 497.5 1 525.6 1 639.5 1 688.5 1 732.6 1 745.1 1 529.1 1 598.8
Other residents 20.6 20.4 20.4 22.5 22.3 22.1 22.4 21.1 21.1 20.9 20.7 21.1 21.1 21.0 21.5
Holdings of shares
and other equity
issued by other
residents 594.2 600.1 603.7 603.6 606.0 607.3 601.1 608.6 594.9 596.2 597.5 612.0 618.2 618.6 611.9
Foreign assets 23 777.4 24 231.7 23 890.6 23 545.3 23 600.4 24 611.7 23 855.0 23 804.0 23 612.1 24 103.3 24 127.9 23 679.9 23 944.7 23 810.4 23 850.9
Fixed assets 205.3 207.9 205.7 205.3 206.0 206.5 206.4 206.7 214.2 214.3 213.7 214.0 213.2 214.1 214.6
Remaining assets 411.8 447.8 390.8 383.1 442.4 368.0 370.9 355.4 369.6 408.6 387.0 374.0 411.0 370.0 363.3
Total assets 38 805.7 39 324.5 39 120.6 38 877.2 39 183.3 40 173.4 39 270.0 39 292.2 39 156.8 39 782.9 39 888.4 39 452.3 39 799.7 39 411.0 39 523.5
LIABILITIES
Currency outside
MFIs 3 796.5 3 791.4 3 809.3 3 833.9 3 839.1 3 879.5 3 918.7 3 904.5 3 913.3 3 937.3 3 942.8 4 018.4 3 960.8 3 968.1 3 976.3
Deposits of central
government 458.4 536.8 506.8 468.7 918.6 896.5 661.8 734.8 825.2 1 262.7 1 205.2 1 042.2 1 104.8 1 096.2 924.5
Deposits of other
general government
and other residents 10 579.5 10 885.8 10 852.3 10 998.6 11 041.8 11 111.6 11 046.5 11 168.4 11 161.4 11 200.6 11 279.9 11 555.6 11 290.5 11 463.3 11 449.6
Money market fund
shares and units 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Debt securities issued 64.5 59.0 57.8 61.9 62.8 64.8 65.0 65.4 65.5 56.5 57.2 80.3 86.1 82.5 84.9
Capital and rezerves 3 901.3 3 945.2 3 720.9 3 675.3 3 314.8 3 413.0 3 469.2 3 512.9 3 546.0 3 523.0 3 475.6 3 459.4 3 462.1 3 481.8 3 409.4
External liabilities 18 367.7 18 478.8 18 577.7 18 227.7 18 341.3 19 249.4 18 566.0 18 403.3 18 185.1 18 296.7 18 414.1 17 830.9 18 439.4 17 919.0 18 265.2
Remaining liabilities 1 637.5 1 626.4 1 595.4 1 610.3 1 662.7 1 558.7 1 542.6 1 503.1 1 460.1 1 508.6 1 513.1 1 470.4 1 456.0 1 399.3 1 413.3
Excess of inter-MFI
liabilities 0.4 1.1 0.4 0.8 2.2 0.0 0.2 –0.2 0.2 –2.5 0.4 –4.9 0.0 0.9 0.3
8.

58
AGGREGATED BALANCE SHEET OF MFIs (EXCLUDING LATVIJAS BANKA )
2016 2017
MFI reserves 4 148.0 4 323.3 3 735.5 3 956.6 3 896.0 3 239.0 3 836.7 3 774.3 4 077.7 4 378.2 4 434.0 4 383.5 4 097.2 4 181.8 3 993.4
Vault cash in euro 171.7 178.6 189.6 174.8 184.2 179.0 180.3 181.2 184.9 181.7 182.7 192.4 187.1 187.4 190.1
Deposits with
Latvijas Banka 3 976.3 4 144.8 3 546.0 3 781.9 3 711.8 3 060.0 3 656.4 3 593.1 3 892.8 4 196.5 4 251.3 4 191.1 3 910.1 3 994.4 3 803.3
Foreign assets 13 095.7 12 869.2 12 374.8 11 766.7 11 499.7 12 195.2 11 365.3 11 144.2 10 516.5 10 744.5 10 524.0 9 973.9 10 158.8 10 273.3 10 113.9
Claims on the central
government 955.9 972.7 1 019.7 1 028.6 1 046.0 1 061.6 893.2 914.4 926.6 983.7 1 023.8 1 056.2 1 062.1 822.0 857.2
Loans 91.9 91.3 90.6 89.7 90.0 87.2 85.6 85.2 81.3 79.6 79.5 79.6 82.0 82.7 82.2
Holdings of
securities other
than shares 864.0 881.4 929.1 938.8 955.9 974.5 807.6 829.2 845.3 904.1 944.3 976.6 980.1 739.4 775.0
Claims on the local
government 35.6 35.1 34.5 34.3 30.3 30.1 30.1 30.4 34.0 30.0 33.5 29.6 29.4 29.2 28.7
Loans 35.2 34.7 34.2 33.9 29.9 29.8 29.7 30.1 33.6 29.7 33.2 29.2 29.1 28.9 28.3
Holdings of
securities other
than shares 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.4
Claims on the
financial institutions 1 154.3 1 170.5 1 435.3 1 440.6 1 457.5 1 468.1 1 467.0 1 480.7 1 495.6 1 489.8 1 503.5 1 493.8 1 518.2 1 519.6 1 511.2
Loans 670.2 680.6 948.5 954.0 970.6 984.5 989.5 1 002.5 1 024.3 1 017.5 1 030.2 1 029.6 1 047.9 1 049.0 1 047.3
Holdings of
securities other
than shares 1.5 1.4 1.4 1.4 1.8 1.8 2.0 1.9 1.9 1.8 1.7 1.7 1.7 1.7 1.7
Holdings of shares
and other equity 482.6 488.4 485.4 485.2 485.1 481.7 475.5 476.4 469.4 470.5 471.6 462.5 468.5 468.9 462.2
Claims on public
non-financial
corporations 681.6 679.8 676.6 676.8 668.1 682.5 677.1 673.0 676.2 680.7 677.8 686.3 684.8 682.8 686.0
Loans 678.0 676.2 673.1 671.3 663.0 677.7 672.3 669.3 672.6 677.1 674.4 682.7 681.2 679.3 682.0
Holdings of
securities other
than shares 3.7 3.6 3.5 5.5 5.0 4.8 4.8 3.7 3.7 3.6 3.5 3.6 3.6 3.5 4.0
Holdings of shares
and other equity 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Claims on private
non-financial
corporations 5 676.5 5 672.5 5 572.1 5 632.6 5 775.6 5 774.8 5 807.2 5 838.8 5 836.0 5 809.5 5 851.4 5 858.2 5 872.3 5 882.6 5 905.4
Loans 5 549.4 5 545.4 5 438.3 5 498.7 5 639.2 5 633.7 5 666.1 5 691.0 5 695.0 5 668.3 5 710.0 5 692.9 5 706.8 5 717.1 5 740.0
Holdings of
securities other
than shares 15.4 15.4 15.5 15.5 15.5 15.5 15.5 15.5 15.5 15.5 15.5 15.8 15.8 15.8 15.8
Holdings of shares
and other equity 111.6 111.7 118.4 118.4 120.9 125.6 125.6 132.3 125.5 125.7 125.9 149.5 149.7 149.7 149.7
Claims on
households 5 375.5 5 362.6 5 339.9 5 336.1 5 338.4 5 334.0 5 324.7 5 320.7 5 312.6 5 327.8 5 325.9 5 304.7 5 299.5 5 290.8 5 282.8
Loans 5 375.5 5 362.6 5 339.9 5 336.1 5 338.4 5 334.0 5 324.7 5 320.7 5 312.6 5 327.8 5 325.9 5 304.7 5 299.5 5 290.8 5 282.8
Holdings of
securities other
than shares 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Fixed assets 166.9 169.6 167.6 167.3 168.1 168.7 168.8 169.1 176.6 176.6 176.1 176.4 175.8 176.8 177.2
Other assets 400.7 435.2 380.7 376.9 433.6 359.0 361.3 343.2 357.3 396.2 372.4 358.7 398.9 355.7 351.9
Claims on resident
MFIs 167.7 190.2 141.7 139.8 135.0 146.5 119.7 120.8 126.8 106.0 106.6 92.3 121.9 109.3 109.8
Holdings of MFI
securities other than
shares 0 0 0 0 0 0 0 0 0 0 0 14.5 8.7 8.6 7.5
Money market fund
shares and units 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Holdings of MFI
shares and other
equity 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
TOTAL ASSETS 31 858.3 31 880.6 30 878.5 30 556.4 30 448.1 30 459.6 30 051.1 29 809.6 29 535.9 30 123.2 30 029.1 29 428.1 29 427.5 29 332.5 29 024.9
9.a

59
AGGREGATED BALANCE SHEET OF MFIs (EXCLUDING LATVIJAS BANKA)
2016 2017
Overnight deposits in
euro
6 993.9 7 175.4 7 253.5 7 376.1 7 332.2 7 493.2 7 346.7 7 452.2 7 489.2 7 534.4 7 566.5 7 926.4 7 704.5 7 871.6 7 889.1
Financial institutions 552.8 617.0 627.0 631.6 639.8 609.0 590.7 724.9 719.9 623.3 560.7 557.0 494.1 519.1 472.7
Public non-financial
corporations 327.7 384.0 410.1 527.0 457.6 485.1 433.9 438.2 410.2 415.1 393.1 404.0 426.4 486.0 533.1
Private non-financial
corporations 2 648.2 2 683.4 2 716.8 2 653.5 2 665.0 2 732.8 2 656.6 2 642.1 2 698.6 2 791.6 2 840.8 3 025.3 2 868.6 2 935.7 2 935.4
Households 3 465.2 3 491.1 3 499.6 3 563.9 3 569.8 3 666.3 3 665.4 3 647.0 3 660.5 3 704.4 3 771.9 3 940.2 3 915.4 3 930.9 3 948.0
Time deposits in euro 1 237.3 1 234.1 1 245.6 1 206.7 1 197.2 1 136.7 1 150.9 1 133.2 1 121.1 1 118.5 1 134.7 1 029.6 973.1 947.2 916.5
corporations 41.9 39.9 40.2 28.0 28.6 28.5 33.1 34.8 32.8 42.4 42.8 21.1 21.1 19.8 20.3
corporations 146.7 145.8 163.7 170.8 156.6 102.2 91.3 81.0 83.3 80.1 109.7 74.0 109.9 102.3 104.6
Households 746.1 735.6 719.6 711.2 713.4 700.3 695.1 691.9 678.3 682.0 677.1 661.6 635.7 638.8 629.0
notice in euro 745.6 769.5 735.2 747.1 748.3 753.4 757.8 764.1 774.2 788.2 801.0 808.9 831.8 841.6 830.1
corporations 12.7 12.8 6.2 7.0 6.2 6.5 6.5 6.8 6.8 6.8 8.7 9.0 9.0 9.0 9.0
corporations 70.3 80.6 47.0 47.6 45.1 40.9 38.9 40.0 44.3 49.5 50.1 44.8 57.7 57.3 47.5
Households 660.4 674.1 680.3 690.9 695.5 704.8 711.3 716.3 722.0 730.2 740.1 751.6 761.0 771.3 772.1
Repos in euro 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Foreign currency
deposits of residents 1 253.4 1 330.4 1 234.9 1 272.2 1 356.9 1 333.5 1 349.1 1 352.2 1 329.0 1 295.5 1 298.3 1 361.2 1 330.1 1 340.5 1 323.1
corporations 8.0 5.0 4.8 4.7 5.8 5.6 4.9 3.9 3.5 4.0 3.6 3.2 2.4 3.5 3.1
corporations 443.5 502.2 430.4 461.3 481.2 501.6 503.3 526.5 510.3 505.4 502.3 605.0 569.8 530.0 516.0
Households 640.0 651.7 638.6 640.4 649.0 651.1 661.3 663.0 656.4 644.3 655.8 669.7 671.6 681.3 680.7
Deposits of central
government 279.6 367.7 344.2 304.9 703.3 675.8 499.7 577.1 660.7 1 094.8 1 027.6 835.6 937.9 876.5 740.5
euro 172.4 226.2 196.9 205.0 536.6 508.8 289.3 345.4 379.3 574.4 517.9 373.6 397.9 486.7 383.7
Time deposits in euro 93.7 127.6 127.7 78.6 143.2 143.2 191.7 201.7 222.2 464.0 462.0 418.8 480.1 333.0 302.0
Deposits redeemable
at notice and repos in
euro 9.3 9.7 16.5 16.7 18.0 18.0 12.5 11.2 11.4 11.7 11.9 12.2 12.1 15.1 14.8
Foreign currency
deposits 4.2 4.2 3.2 4.5 5.5 5.8 6.3 18.8 47.9 44.6 35.8 31.1 47.9 41.7 40.0
Deposits of local
government 235.2 258.3 285.7 294.1 305.7 280.8 272.7 297.9 286.4 296.9 313.1 264.1 280.3 292.3 321.5
euro 232.3 255.3 282.5 291.2 296.3 271.6 263.4 290.8 279.3 286.8 305.0 255.9 272.2 284.3 313.5
Time deposits in euro 0.6 0.6 0.7 0.4 6.9 6.6 6.6 4.3 4.3 7.3 5.3 5.3 5.3 5.3 5.3
Deposits redeemable
at notice and repos in
euro 2.2 2.4 2.5 2.5 2.5 2.6 2.6 2.7 2.7 2.7 2.8 2.8 2.7 2.7 2.7
Foreign currency
deposits 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
9.b

60
AGGREGATED BALANCE SHEET OF MFIs (EXCLUDING LATVIJAS BANKA) (CONT.)
2016 2017
Foreign liabilities 15 752.9 15 374.7 14 726.2 14 322.0 14 077.1 14 114.9 14 016.8 13 574.2 13 218.5 13 281.8 13 142.2 12 481.1 12 580.1 12 476.4 12 369.6
Liabilities to Latvijas
Banka 253.7 245.0 245.0 245.0 245.0 234.3 234.3 234.3 244.7 244.7 244.7 257.2 257.2 244.7 244.7
Money market fund
shares and units 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Debt securities issued 64.5 59.0 57.8 61.9 62.8 64.8 65.0 65.4 65.5 56.5 57.2 94.8 94.7 91.1 92.4
Residents 1 339.5 1 350.9 1 115.1 1 093.3 1 097.6 1 143.9 1 177.0 1 216.3 1 239.5 1 280.3 1 303.7 1 295.5 1 344.3 1 326.7 1 258.6
Retained earnings of
the reporting year 31.0 63.6 106.0 141.7 173.2 268.9 300.9 340.0 372.1 406.7 437.9 451.5 32.9 60.8 104.2
Non-residents 2 088.8 2 089.6 2 088.7 2 088.7 1 712.9 1 712.1 1 707.1 1 706.9 1 707.0 1 707.0 1 707.0 1 710.6 1 710.6 1 709.4 1 709.4
Provisions 886.5 890.3 863.0 844.8 826.7 812.2 800.8 791.6 786.3 785.4 779.3 768.6 760.8 766.7 783.4
Other liabilities (incl.
subordinated liabilities) 559.3 544.8 541.4 558.9 645.9 557.3 553.3 523.6 486.9 535.8 546.8 507.3 500.0 437.6 435.8
Liabilities to resident
MFIs 168.1 191.1 142.1 140.6 136.8 146.5 119.9 120.6 126.9 103.5 107.1 87.4 122.1 110.2 110.2
TOTAL LIABILITIES 31 858.3 31 880.6 30 878.5 30 556.4 30 448.1 30 459.6 30 051.1 29 809.6 29 535.9 30 123.2 30 029.1 29 428.1 29 427.5 29 332.5 29 024.9
Memo items
Trust assets 1 680.1 1 708.5 1 596.5 1 539.0 1 485.8 1 459.1 1 483.3 1 421.3 1 463.4 1 369.3 1 250.6 827.0 812.8 806.7 799.5
Foreign 1 544.8 1 571.4 1 455.8 1 398.2 1 347.9 1 320.6 1 344.9 1 282.2 1 339.4 1 246.1 1 125.0 697.5 691.3 691.0 680.5
Domestic 135.3 137.1 140.7 140.8 138.0 138.5 138.4 139.1 124.0 123.1 125.5 129.6 121.6 115.7 119.0
Trust liabilities 1 680.1 1 708.5 1 596.5 1 539.0 1 485.8 1 459.1 1 483.3 1 421.3 1 463.4 1 369.3 1 250.6 827.0 812.8 806.7 799.5
Foreign 1 597.6 1 625.8 1 507.8 1 450.2 1 398.0 1 371.5 1 393.6 1 331.2 1 376.1 1 277.8 1 157.0 726.6 714.9 710.2 699.6
Domestic 82.5 82.8 88.6 88.8 87.8 87.6 89.7 90.1 87.3 91.5 93.6 100.5 97.9 96.6 99.9
9.b

61
Net foreign
assets
Net domestic assets Total
Credit to residents Other items (net)
General
government
(net)
Households Financial
institutions and
private
non-financial
corporations
Public
non-financial
corporations
2016
I –2 657.2 13 364.6 476.7 5 375.5 6 830.8 681.6 –477.2 12 887.4 10 230.2
II –2 505.5 13 267.2 381.8 5 362.6 6 843.0 679.8 –252.3 13 014.9 10 509.4
III –2 351.4 13 448.2 424.3 5 339.9 7 007.4 676.6 –627.6 12 820.6 10 469.2
IV –2 555.3 13 550.0 463.9 5 336.1 7 073.2 676.8 –392.6 13 157.4 10 602.1
V –2 577.4 13 306.9 67.3 5 338.4 7 233.1 668.1 –95.0 13 211.9 10 634.5
VI –1 920.7 13 394.5 135.1 5 334.0 7 242.9 682.5 –757.0 12 637.5 10 716.8
VII –2 652.6 13 426.8 150.8 5 324.7 7 274.2 677.1 –169.8 13 257.0 10 604.4
VIII –2 430.0 13 383.1 69.9 5 320.7 7 319.5 673.0 –251.3 13 131.8 10 701.8
IX –2 702.0 13 333.9 13.5 5 312.6 7 331.6 676.2 81.5 13 415.4 10 713.4
X –2 537.3 12 929.9 –377.9 5 327.8 7 299.3 680.7 344.1 13 274.0 10 736.7
XI –2 618.2 13 075.2 –283.5 5 325.9 7 355.0 677.8 343.5 13 418.7 10 800.5
XII –2 507.2 13 329.1 –13.9 5 304.7 7 352.0 686.3 304.1 13 633.2 11 126.0
2017
I –2 421.3 13 248.1 –126.7 5 299.5 7 390.5 684.8 12.7 13 260.8 10 839.5
II –2 203.1 13 058.2 –317.6 5 290.8 7 402.2 682.8 145.9 13 204.1 11 001.0
III –2 255.8 13 209.3 –176.1 5 282.8 7 416.6 686.0 5.4 13 214.7 10 958.9
MONETARY SURVEY OF MFIs (EXCLUDING LATVIJAS BANKA)
Overnight deposits (resident) Deposits with agreed maturity and redeemable at notice (resident) Total
institutions and
private
non-financial
corporations
Public
non-financial
corporations
institutions and
private
non-financial
corporations
Public
non-financial
corporations
2016
I 7 897.9 3 883.3 3 682.6 332.0 2 332.2 1 628.5 645.5 58.3 10 230.2
II 8 148.5 3 915.9 3 847.4 385.3 2 360.9 1 636.6 667.9 56.3 10 509.4
III 8 131.3 3 918.3 3 800.8 412.2 2 337.9 1 619.8 669.0 49.1 10 469.2
IV 8 285.4 3 986.4 3 770.8 528.2 2 316.7 1 620.1 658.0 38.6 10 602.1
V 8 305.1 3 991.8 3 853.5 459.8 2 329.3 1 635.9 655.0 38.4 10 634.5
VI 8 453.3 4 094.1 3 872.1 487.0 2 263.6 1 628.5 596.5 38.6 10 716.8
VII 8 320.6 4 100.0 3 784.5 436.1 2 283.8 1 633.0 608.5 42.3 10 604.4
VIII 8 412.2 4 086.4 3 885.6 440.2 2 289.6 1 631.9 614.3 43.4 10 701.8
IX 8 409.5 4 089.1 3 908.5 412.0 2 303.9 1 628.1 634.4 41.4 10 713.4
X 8 418.1 4 118.8 3 882.0 417.3 2 318.6 1 642.1 625.5 51.0 10 736.7
XI 8 429.8 4 178.4 3 855.7 395.7 2 370.7 1 666.4 651.9 52.4 10 800.5
XII 8 768.3 4 360.3 4 000.8 407.2 2 357.8 1 662.8 664.9 30.1 11 126.0
2017
I 8 550.9 4 342.2 3 779.9 428.8 2 288.5 1 641.5 617.0 30.0 10 839.5
II 8 778.4 4 364.0 3 925.9 488.5 2 222.6 1 658.3 534.6 29.7 11 001.0
III 8 774.1 4 383.9 3 854.9 535.2 2 184.8 1 645.9 508.7 30.2 10 958.9
10.

62
FOREIGN ASSETS AND LIABILITIES OF MFIs (EXCLUDING LATVIJAS BANKA)
2016 2017
Claims on MFIs 6 514.6 6 347.2 6 156.3 5 667.2 5 711.9 6 397.2 5 702.3 5 665.8 5 083.6 5 465.7 5 195.9 4 694.1 5 058.9 5 192.7 5 048.7
Loans
Overnight 4 039.4 3 741.7 3 717.9 3 146.0 3 218.1 3 933.7 3 317.3 3 173.4 2 650.7 3 029.6 2 975.9 2 521.6 2 912.4 3 113.0 3 022.7
Short-term 979.9 1 082.6 950.7 1 002.5 956.4 958.2 907.7 1 003.8 955.1 1 013.2 819.6 740.8 743.2 706.2 706.6
Long-term 8.6 8.4 8.1 6.0 6.1 3.7 3.7 3.7 3.5 4.2 1.6 1.0 1.5 0.2 0.2
Redeemable at
notice
11.0 11.0 11.0 11.0 11.0 12.8 12.8 12.8 12.8 12.8 12.9 12.9 1.9 1.9 0.0
Holdings of
shares 1 343.8 1 371.1 1 339.6 1 370.5 1 389.4 1 357.0 1 329.8 1 340.1 1 326.2 1 268.6 1 248.6 1 280.3 1 263.6 1 233.8 1 180.5
Holdings of shares
and other equity 1.1 1.6 1.6 1.8 1.7 1.5 1.7 1.9 1.6 1.7 2.1 0.5 0.4 0.5 0.4
Other claims 130.8 130.8 127.3 129.4 129.1 130.3 129.3 130.1 133.7 135.7 135.2 137.0 135.9 137.2 138.3
Claims on non-MFIs 6 145.4 6 075.1 5 775.8 5 700.7 5 391.4 5 399.3 5 284.3 5 135.8 5 095.5 4 908.1 4 941.7 4 915.1 4 747.2 4 787.3 4 791.8
Loans
Short-term 905.7 921.2 900.3 872.7 858.7 941.1 952.2 953.0 906.4 915.1 936.1 928.1 929.6 971.7 967.8
Long-term 1 234.6 1 242.2 1 182.5 1 238.4 1 276.8 1 272.8 1 285.5 1 287.6 1 307.5 1 280.9 1 303.6 1 302.1 1 258.3 1 223.7 1 235.1
Holdings of
shares
General govern-
ment sector 2 507.0 2 276.9 2 080.9 1 976.2 1 612.6 1 626.3 1 559.0 1 398.3 1 403.9 1 302.3 1 284.5 1 274.5 1 200.6 1 210.5 1 215.9
Private sector 1 333.6 1 468.9 1 459.6 1 455.9 1 485.9 1 486.4 1 412.5 1 420.9 1 400.5 1 331.4 1 339.8 1 336.6 1 285.9 1 307.2 1 303.0
Holdings of shares
and other equity 104.4 104.6 118.7 123.7 124.1 39.4 43.0 43.5 44.3 45.7 45.0 39.5 39.1 40.4 35.4
Other claims 60.1 61.3 33.7 33.7 33.2 33.2 32.1 32.5 32.9 32.8 32.6 34.3 33.8 33.8 34.5
Vault cash in foreign
currencies 34.8 41.4 31.0 35.1 40.0 37.6 35.2 41.2 36.3 35.5 38.5 39.1 32.4 39.3 33.0
Other assets
Other assets 400.9 405.5 411.7 363.8 356.5 361.2 343.5 301.4 301.1 335.2 347.8 325.6 320.3 254.1 240.4
Total foreign assets 13 095.7 12 869.2 12 374.8 11 766.7 11 499.7 12 195.2 11 365.3 11 144.2 10 516.5 10 744.5 10 524.0 9 973.9 10 158.8 10 273.3 10 113.9
Memo items
Trust assets 1 544.8 1 571.4 1 455.8 1 398.2 1 347.9 1 320.6 1 344.9 1 282.2 1 339.4 1 246.1 1 125.0 697.5 691.3 691.0 680.5
11.a

63
FOREIGN ASSETS AND LIABILITIES OF MFIs (EXCLUDING LATVIJAS BANKA)
2016 2017
Liabilities to MFIs
Overnight 678.8 564.7 550.3 712.0 462.9 488.6 659.8 479.4 401.2 393.8 336.6 409.6 407.4 373.9 345.0
Short-term 1 479.0 1 365.2 1 508.6 1 373.0 1 623.4 1 586.2 1 635.9 1 768.1 1 791.3 1 769.6 1 721.8 1 569.5 1 722.3 1 693.8 1 638.6
Long-term 940.3 941.0 869.9 880.1 890.6 917.4 918.3 818.2 816.2 808.4 811.1 857.2 911.2 846.0 939.4
Redeemable at notice 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Of which liabilities to
associated and affiliated
MFIs 3 045.9 2 820.9 2 889.1 2 920.8 2 939.9 2 952.6 3 180.7 3 028.4 2 976.7 2 944.3 2 848.4 2 817.9 3 005.8 2 887.8 2 903.1
Non-MFI deposits
Overnight 10 958.4 10 755.7 9 946.1 9 558.5 9 351.6 9 341.3 9 030.6 8 790.5 8 475.2 8 551.3 8 468.5 7 933.5 7 912.4 7 889.3 7 805.7
Short-term 226.0 252.5 386.3 401.4 327.9 309.2 292.6 284.9 278.3 283.8 330.9 258.5 227.0 228.0 226.8
Long-term 624.6 613.9 556.2 546.8 549.6 613.1 602.4 599.9 609.2 607.9 607.4 596.4 577.2 576.7 581.9
Redeemable at notice 98.1 97.2 96.0 96.0 93.6 90.4 89.3 96.9 104.3 99.5 102.8 101.8 98.8 93.5 95.6
Other liabilities
Other liabilities1
747.7 784.4 812.8 754.1 777.4 768.7 787.9 736.2 742.8 767.6 762.9 754.4 723.9 775.3 736.6
Total foreign liabilities 15 752.9 15 374.7 14 726.2 14 322.0 14 077.1 14 114.9 14 016.8 13 574.2 13 218.5 13 281.8 13 142.1 12 481.1 12 580.1 12 476.4 12 369.6
Memo items
Trust liabilities 1 597.6 1 625.8 1 507.8 1 450.2 1 398.0 1 371.5 1 393.6 1 331.2 1 376.1 1 277.8 1 157.0 726.6 714.9 710.2 699.6
1
Including subordinated liabilities.
11.b
SELECTED ITEMS IN THE MONTHLY FINANCIAL POSITION REPORT OF MFIs (EXCLUDING LATVIJAS BANKA) BY
GROUP OF COUNTRIES
(excluding Latvia; at end of period; millions of euro)
Claims on MFIs Loans to non-MFIs Liabilities to MFIs Deposits by non-MFIs
EU Other
countries and
international
institutions
EU Other
countries and
international
institutions
EU Other
countries and
international
institutions
EU Other
countries and
international
institutions
incl. euro area
countries
incl. euro
area countries
incl. euro area
countries
incl. euro area
countries
2016
I 3 453.5 1 914.5 1 585.4 818.5 573.5 1 321.9 2 422.2 518.6 675.9 3 825.3 1 228.4 8 081.9
II 3 274.5 1 820.0 1 569.2 849.1 605.1 1 314.3 2 267.0 490.2 603.9 3 762.7 1 221.7 7 956.7
III 3 006.2 1 697.5 1 681.5 866.2 592.8 1 216.6 2 391.0 474.3 537.7 3 499.0 1 170.2 7 485.6
IV 2 833.3 1 661.0 1 332.3 940.7 652.6 1 170.4 2 427.8 499.1 537.4 3 482.6 1 218.3 7 120.2
V 2 660.5 1 509.6 1 531.1 950.2 660.0 1 185.3 2 444.0 361.3 533.0 3 450.5 1 152.7 6 872.3
VI 3 163.7 1 980.6 1 744.7 1 013.0 727.0 1 201.0 2 421.5 452.2 570.7 3 560.5 1 223.9 6 793.5
VII 2 765.2 1 757.9 1 476.3 1 014.5 735.4 1 223.3 2 645.6 600.6 568.5 3 521.0 1 211.7 6 493.8
VIII 2 548.5 1 473.4 1 645.2 1 014.1 741.9 1 226.4 2 486.4 322.4 579.3 3 358.2 1 184.6 6 414.0
IX 2 192.4 1 248.8 1 429.7 1 007.7 738.9 1 206.2 2 444.0 419.6 564.7 3 346.9 1 196.4 6 120.1
X 2 590.6 1 498.1 1 469.2 974.2 732.7 1 221.8 2 421.2 405.3 550.5 3 357.4 1 206.7 6 185.0
XI 2 459.5 1 478.6 1 350.5 999.2 743.4 1 240.5 2 330.6 292.7 539.0 3 415.3 1 291.4 6 094.4
XII 1 981.3 1 127.9 1 295.0 1 018.5 772.1 1 211.6 2 250.3 328.1 586.2 3 175.9 1 122.7 5 714.4
2017
I 2 369.7 1 359.2 1 289.3 991.9 754.5 1 195.9 2 439.5 441.3 601.4 3 161.1 1 083.5 5 654.3
II 2 484.1 1 310.5 1 337.1 1 010.2 746.6 1 185.1 2 338.6 408.3 575.0 3 219.8 1 128.6 5 567.6
III 2 452.1 1 346.3 1 277.4 1 035.3 775.1 1 167.6 2 381.3 373.6 541.7 3 172.2 1 176.1 5 537.9
12.

64
MATURITY PROFILE OF DEPOSITS OF RESIDENT FINANCIAL INSTITUTIONS, NON-FINANCIAL CORPORATIONS AND
HOUSEHOLDS
2016 2017
Overnight deposits
Amount 7 897.9 8 148.5 8 131.3 8 285.4 8 305.1 8 453.3 8 320.6 8 412.2 8 409.5 8 418.1 8 429.8 8 768.3 8 550.9 8 778.4 8 774.1
%1
77.2 77.5 77.7 78.1 78.1 78.9 78.5 78.6 78.5 78.4 78.0 78.8 78.9 79.8 80.1
Time deposits
Maturity of
1–6 months
Amount 213.0 223.6 259.5 269.8 279.1 253.0 241.0 264.3 291.5 298.3 314.1 393.0 362.1 307.9 308.6
%1
2.1 2.1 2.5 2.5 2.6 2.4 2.3 2.5 2.7 2.8 2.9 3.5 3.3 2.8 2.8
Maturity of
6–12 months
Amount 611.5 604.9 607.8 573.7 575.2 556.7 583.9 563.9 561.2 560.9 586.1 529.5 526.8 504.1 500.6
%1
6.0 5.8 5.8 5.4 5.4 5.2 5.5 5.3 5.2 5.2 5.4 4.8 4.9 4.6 4.6
Long-term
Amount 708.0 707.9 682.1 673.1 673.7 646.9 647.5 643.4 623.3 619.7 617.1 574.2 517.2 515.7 492.5
%1
6.9 6.8 6.5 6.3 6.3 6.0 6.1 6.0 5.8 5.8 5.8 5.2 4.8 4.7 4.5
Maturity of
1–2 years
Amount 378.5 380.7 362.5 348.6 348.4 318.9 317.6 315.6 295.7 292.3 286.9 246.4 233.7 233.4 212.7
%1
3.7 3.7 3.5 3.3 3.3 3.0 3.0 2.9 2.8 2.7 2.7 2.2 2.2 2.1 1.9
Maturity of
over 2 years
Amount 329.4 327.1 319.6 324.5 325.3 328.0 329.9 327.7 327.6 327.4 330.2 327.8 283.5 282.3 279.8
%1
3.2 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.0 3.1 2.9 2.6 2.6 2.6
Deposits redeemable at notice
Up to 3 months
Amount 794.9 819.9 783.7 795.2 796.4 802.3 806.8 813.6 823.5 835.3 848.9 856.6 878.0 886.5 874.9
%1
7.8 7.8 7.5 7.5 7.5 7.5 7.6 7.6 7.7 7.8 7.9 7.7 8.1 8.0 7.9
Over 3 months
Amount 4.8 4.7 4.8 4.8 4.9 4.7 4.7 4.6 4.5 4.3 4.5 4.5 4.4 8.3 8.2
%1
0 0 0 0 0 0 0 0 0 0 0 0 0 0.1 0.1
Repos
Amount 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
%1
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Total deposits 10 230.2 10 509.4 10 469.2 10 602.1 10 634.5 10 716.8 10 604.4 10 701.8 10 713.4 10 736.7 10 800.5 11 126.0 10 839.5 11 001.0 10 958.9
1
As percent of total deposits of resident financial institutions, non-financial corporations and households.
13.

65
DEPOSITS BY FINANCIAL INSTITUTIONS
Overnight With agreed maturity Redeemable at notice Repos Total deposits
Up to 1 year 1–2 years Over 2 years Up to 3 months Over 3 months In euro
Insurance corporations
2016
I 56.8 6.4 10.2 11.0 1.0 0 0 85.5 83.1
II 56.2 18.2 9.6 10.9 1.0 0 0 95.8 90.0
III 50.3 17.0 8.6 7.1 0.9 0 0 83.9 76.1
IV 51.6 16.2 8.5 7.1 0.8 0 0 84.1 76.1
V 45.8 15.5 10.1 7.1 0.8 0 0 79.3 71.7
VI 49.1 16.3 9.6 7.1 0.8 0 0 82.9 74.7
VII 60.9 14.2 9.6 7.1 0.8 0 0 92.6 84.2
VIII 199.6 16.0 9.1 7.1 0.8 0 0 232.6 223.6
IX 196.3 16.6 9.1 7.0 0.9 0 0 229.9 221.0
X 136.1 13.7 9.1 7.0 0.8 0 0 166.8 158.4
XI 132.0 12.7 9.1 5.9 0.8 0 0 160.5 153.3
XII 105.6 10.2 6.7 5.9 0.8 0 0 129.1 123.5
2017
I 97.6 11.2 5.3 5.9 0.8 0 0 120.7 115.0
II 88.9 2.2 5.3 5.5 0.8 0 0 102.7 96.9
III 76.7 2.3 5.2 3.0 0.8 0 0 88.0 81.5
Pension funds
2016
I 352.2 78.2 63.7 28.5 0 0 0 522.6 465.6
II 417.4 86.3 64.3 24.7 0 0 0 592.7 525.3
III 381.2 86.3 59.3 24.7 0 0 0 551.4 494.2
IV 406.6 64.9 59.3 24.7 0 0 0 555.5 500.8
V 419.4 64.8 58.6 25.6 0 0 0 568.5 506.4
VI 369.3 44.8 51.6 25.6 0 0 0 491.4 460.5
VII 389.8 44.8 51.8 26.6 0 0 0 513.0 469.2
VIII 378.4 45.8 52.1 26.6 0 0 0 503.0 463.9
IX 369.9 45.6 52.1 26.3 0 0 0 493.9 458.9
X 326.5 36.8 52.1 24.8 0 0 0 440.2 414.5
XI 245.5 37.6 52.2 22.5 0 0 0 357.8 330.4
XII 269.1 38.7 22.6 22.2 0 0 0 352.6 335.6
2017
I 210.0 24.8 22.6 22.8 0 0 0 280.1 264.2
II 276.0 16.7 22.0 22.3 0 0 0 336.9 293.1
III 246.1 18.0 6.0 19.3 0 0 0 289.3 249.4
14.a

66
DEPOSITS BY FINANCIAL INSTITUTIONS (CONT.)
OFIs and financial auxiliaries
2016
I 270.5 39.1 4.7 62.6 1.2 0 0 378.1 285.4
II 264.9 38.7 5.6 60.1 1.2 0 0 370.5 290.7
III 294.6 37.9 6.7 59.1 1.0 0 0 399.2 326.5
IV 280.2 32.4 5.9 59.8 0.9 0 0 379.3 305.2
V 340.2 30.5 8.2 59.8 0.8 0 0 439.6 314.8
VI 314.8 54.7 7.4 60.2 0.4 0 0 437.6 326.2
VII 272.9 80.5 7.9 58.8 0.3 0 0 420.4 315.9
VIII 261.3 76.5 8.1 56.7 0.3 0 0 403.0 311.2
IX 267.4 76.5 8.5 56.9 0.3 0 0 409.7 314.8
X 259.2 76.4 7.6 57.3 0.9 0 0 401.5 310.2
XI 280.3 71.6 7.9 56.8 1.4 0 0 418.2 329.7
XII 227.9 73.3 7.5 57.4 2.7 0 0 368.8 319.6
2017
I 232.2 73.9 8.3 3.0 3.4 0 0 320.8 269.0
II 243.3 72.2 7.2 3.0 3.3 0 0 329.0 265.9
III 227.1 72.5 6.0 3.4 0.8 0 0 309.8 249.4
Investment funds, excluding money market funds, and alternative investment funds
2016
I 27.9 4.5 0.7 0 0 0 0 33.1 23.3
II 39.0 4.4 0.7 0 0 0 0 44.1 25.6
III 48.1 28.1 1.2 0 0 0 0 77.4 54.1
IV 47.4 28.1 1.2 0 0 0 0 76.7 47.7
V 43.8 28.3 1.2 0 0 0 0 73.3 46.9
VI 38.5 39.4 1.2 0 0 0 0 79.1 54.5
VII 36.3 39.4 1.2 0 0 0 0 76.9 54.0
VIII 30.6 39.9 1.2 0 0 0 0 71.7 52.6
IX 30.5 41.3 1.2 0 0 0 0 73.0 53.1
X 29.7 42.2 0.5 0 0 0 0 72.5 56.0
XI 25.5 42.2 0.5 0 0 0 0 68.2 54.7
XII 23.4 42.3 0.5 0 0 0 0 66.1 54.6
2017
I 26.6 42.2 0.5 0 0 0 0 69.3 56.4
II 23.8 42.7 0.0 0 0 0 0 66.6 53.5
III 32.0 41.0 0.0 0 0 0 0 73.0 56.7
14.a

67
DEPOSITS BY NON-FINANCIAL CORPORATIONS
Public non-financial corporations
2016
I 332.0 41.1 2.6 1.9 12.7 0 0 390.3 382.3
II 385.3 39.6 2.1 1.9 12.8 0 0 441.6 436.6
III 412.2 38.9 2.1 1.8 6.2 0 0 461.3 456.5
IV 528.2 29.8 0 1.8 7.0 0 0 566.8 562.1
V 459.8 30.4 0 1.8 6.2 0 0 498.2 492.4
VI 487.0 30.3 0 1.7 6.5 0 0 525.6 520.1
VII 436.1 34.0 0 1.7 6.5 0 0 478.4 473.5
VIII 440.3 34.9 0 1.7 6.8 0 0 483.7 479.8
IX 412.0 32.9 0 1.6 6.8 0 0 453.3 449.8
X 417.3 42.6 0 1.6 6.8 0 0 468.2 464.3
XI 395.7 42.2 0 1.6 8.7 0 0 448.2 444.6
XII 407.2 19.5 0 1.5 9.0 0 0 437.2 434.1
2017
I 428.8 19.5 0 1.5 9.0 0 0 458.9 456.5
II 488.5 20.5 0 0.2 9.0 0 0 518.2 514.7
III 535.2 21.0 0 0.2 9.0 0 0 565.4 562.3
Private non-financial corporations
2016
I 2 975.2 203.0 38.4 19.1 73.1 0.0 0 3 308.8 2 865.2
II 3 069.8 201.5 38.7 18.7 83.3 0.0 0 3 412.1 2 909.8
III 3 026.6 224.5 36.9 20.3 49.6 0.0 0 3 357.9 2 927.5
IV 2 985.0 241.8 36.6 19.6 50.2 0.0 0 3 333.2 2 871.9
V 3 004.3 248.9 30.4 16.5 47.8 0.0 0 3 347.9 2 866.7
VI 3 100.4 201.6 15.4 16.5 43.5 0.1 0 3 377.6 2 875.9
VII 3 024.7 193.3 14.6 15.9 41.5 0.1 0 3 290.1 2 786.8
VIII 3 015.7 201.3 15.1 14.8 42.7 0.0 0 3 289.7 2 763.2
IX 3 044.5 218.5 10.8 15.6 47.0 0.0 0 3 336.4 2 826.2
X 3 130.6 217.7 10.3 15.8 52.3 0.0 0 3 426.6 2 921.1
XI 3 172.3 250.2 11.5 15.8 53.0 0.0 0 3 502.8 3 000.5
XII 3 374.8 302.5 10.6 13.6 47.5 0.0 0 3 749.1 3 144.1
2017
I 3 213.6 296.7 11.2 23.3 61.1 0.0 0 3 606.0 3 036.2
II 3 293.9 236.6 10.8 23.3 60.7 0.0 0 3 625.3 3 095.3
III 3 273.1 243.6 10.3 25.8 50.8 0.0 0 3 603.5 3 087.4
14.b

68
DEPOSITS BY GOVERNMENT AND NON-RESIDENTS
General government Non-residents
Central
government
Local
government
In euro MFIs Non-MFIs In euro
General
government
Other
2016
I 279.6 235.2 514.8 510.6 3 098.0 11 907.1 8.1 11 899.0 15 005.2 5 924.1
II 367.7 258.3 626.0 621.8 2 870.9 11 719.4 6.6 11 712.8 14 590.3 5 764.8
III 344.2 285.7 629.9 626.7 2 928.8 10 984.6 6.7 10 977.9 13 913.4 5 855.2
IV 304.9 294.1 599.0 594.4 2 965.2 10 602.7 7.6 10 595.1 13 567.9 5 760.7
V 703.3 305.7 1 008.9 1 003.4 2 977.0 10 322.7 6.7 10 316.0 13 299.7 5 797.2
VI 675.8 280.8 956.7 950.8 2 992.2 10 354.0 5.2 10 348.8 13 346.2 5 744.9
VII 499.7 272.7 772.5 766.2 3 214.1 10 014.8 5.0 10 009.8 13 228.9 5 953.6
VIII 577.1 297.9 875.0 856.1 3 065.7 9 772.2 4.5 9 767.7 12 837.9 5 746.3
IX 660.7 286.4 947.1 899.3 3 008.7 9 467.0 4.8 9 462.2 12 475.7 5 648.9
X 1 094.8 296.9 1 391.6 1 347.0 2 971.8 9 542.4 4.6 9 537.8 12 514.2 5 763.9
XI 1 027.6 313.1 1 340.8 1 305.0 2 869.6 9 509.6 4.4 9 505.2 12 379.2 5 676.1
XII 835.6 264.1 1 099.7 1 068.6 2 836.4 8 890.3 11.8 8 878.4 11 726.7 5 517.1
2017
I 937.9 280.3 1 218.2 1 170.3 3 040.9 8 815.4 11.9 8 803.5 11 856.3 5 645.7
II 876.5 292.3 1 168.8 1 127.2 2 913.6 8 787.5 6.1 8 781.4 11 701.1 5 502.2
III 740.5 321.5 1 062.0 1 021.9 2 923.0 8 710.1 5.5 8 704.6 11 633.1 5 504.5
14.d
DEPOSITS BY HOUSEHOLDS
Households
2016
I 3 883.2 452.3 258.2 206.3 706.9 4.8 0 5 511.8 4 871.8
II 3 915.9 439.7 259.7 210.9 721.6 4.7 0 5 552.5 4 900.8
III 3 918.3 434.6 247.7 206.6 726.1 4.7 0 5 538.1 4 899.5
IV 3 986.4 430.3 237.2 211.6 736.3 4.8 0 5 606.5 4 966.1
V 3 991.8 435.9 239.8 214.5 740.9 4.8 0 5 627.7 4 978.7
VI 4 094.1 422.5 233.6 216.8 751.0 4.6 0 5 722.6 5 071.5
VII 4 100.1 418.6 232.3 219.8 757.7 4.5 0 5 733.0 5 071.8
VIII 4 086.4 413.7 229.9 220.8 762.9 4.5 0 5 718.2 5 055.2
IX 4 089.1 421.2 213.9 220.2 768.4 4.4 0 5 717.2 5 060.8
X 4 118.8 429.8 212.6 220.8 774.5 4.3 0 5 760.9 5 116.6
XI 4 178.4 443.7 205.7 227.6 785.0 4.4 0 5 844.8 5 189.0
XII 4 360.3 436.0 198.5 227.3 796.5 4.4 0 6 023.1 5 353.4
2017
I 4 342.2 420.6 185.7 227.1 803.7 4.4 0 5 983.7 5 312.1
II 4 364.0 421.2 188.1 228.2 812.6 8.3 0 6 022.3 5 341.0
III 4 383.9 410.8 185.2 228.2 813.5 8.2 0 6 029.8 5 349.1
14.c

69
MATURITY PROFILE OF LOANS TO RESIDENT FINANCIAL INSTITUTIONS, NON-FINANCIAL CORPORATIONS AND
HOUSEHOLDS
2016 2017
Short-term
Amount 1 681.7 1 733.2 1 635.8 1 656.0 1 763.9 1 740.0 1 704.9 1 746.0 1 825.3 1 823.2 1 851.8 1 747.6 1 808.6 1 821.4 1 846.8
%1
13.7 14.1 13.2 13.3 14.0 13.7 13.5 13.8 14.4 14.4 14.5 13.8 14.2 14.3 14.5
Maturity of 1–5 years
Amount 2 433.7 2 429.0 2 368.4 2 432.8 2 467.4 2 484.3 2 480.3 2 497.9 2 388.3 2 343.6 2 372.3 2 430.3 2 435.4 2 424.2 2 412.3
%1
19.8 19.8 19.1 19.5 19.6 19.7 19.6 19.7 18.8 18.5 18.6 19.1 19.1 19.0 18.9
Maturity of over 5 years
Amount 8 157.7 8 102.6 8 395.6 8 371.3 8 379.9 8 405.6 8 467.4 8 439.6 8 490.8 8 523.8 8 516.5 8 532.0 8 491.4 8 490.6 8 492.9
%1
66.5 66.1 67.7 67.2 66.4 66.6 66.9 66.5 66.8 67.1 66.9 67.1 66.7 66.7 66.6
Total loans 12 273.1 12 264.8 12 399.8 12 460.1 12 611.2 12 629.9 12 652.7 12 683.5 12 704.5 12 690.7 12 740.6 12 709.9 12 735.4 12 736.2 12 752.0
1
As percent of total loans to resident financial institutions, non-financial corporations and households.
15.

70
LOANS TO FINANCIAL INSTITUTIONS AND NON-FINANCIAL CORPORATIONS
Insurance corporations and
pension funds
OFIs and financial auxiliaries Public non-financial corporations Private non-financial corporations
Up to
1 year
In euro Up to
1 year
In euro Up to
1 year
1–5
years
Over
5 years
In euro Up to
1 year
1–5
years
Over
5 years
In euro
2016
I 0.0 0.0 0.0 x x x 6.7 83.0 588.3 678.0 562.0 1 161.4 1 703.0 2 685.0 5 549.4 5 315.7
II 0.0 0.0 0.0 x x x 10.3 81.9 584.1 676.2 561.5 1 202.7 1 693.1 2 649.6 5 545.4 5 309.5
III 0.0 0.0 0.0 x x x 12.4 80.6 580.1 673.1 557.8 1 120.3 1 635.0 2 683.0 5 438.3 5 246.2
IV 0.0 0.0 0.0 x x x 10.7 79.7 580.9 671.3 555.2 1 143.8 1 698.7 2 656.2 5 498.7 5 309.1
V 0.0 0.0 0.0 x x x 12.6 78.8 571.7 663.0 599.0 1 244.3 1 722.5 2 672.3 5 639.2 5 415.1
VI 0.0 0.0 0.0 x x x 11.5 77.9 588.3 677.7 614.5 1 209.5 1 736.5 2 687.7 5 633.7 5 426.3
VII 0.0 0.0 0.0 x x x 5.8 76.5 590.0 672.3 610.1 1 183.4 1 736.0 2 746.7 5 666.1 5 476.8
VIII 0.0 0.0 0.0 x x x 6.9 75.4 587.0 669.3 606.8 1 224.4 1 743.5 2 723.2 5 691.0 5 475.7
IX 0.0 0.0 0.0 x x x 9.6 74.5 588.5 672.6 610.7 1 171.6 1 744.2 2 779.2 5 695.0 5 466.9
X 0.0 0.0 0.0 x x x 8.5 78.1 590.4 677.1 634.6 1 173.5 1 702.7 2 792.1 5 668.3 5 430.9
XI 0.0 0.0 0.0 x x x 10.1 74.4 589.9 674.4 631.4 1 202.3 1 730.2 2 777.5 5 710.0 5 470.7
XII 0.0 0.0 0.0 x x x 13.3 75.5 593.9 682.7 638.8 1 108.3 1 788.0 2 796.5 5 692.9 5 467.8
2017
I 0.0 0.0 0.0 x x x 15.0 75.9 590.3 681.2 640.3 1 166.1 1 791.2 2 749.6 5 706.8 5 479.6
II 0.0 0.0 0.0 x x x 8.2 77.9 593.3 679.3 638.9 1 170.5 1 788.2 2 758.4 5 717.1 5 483.9
III 0.0 0.0 0.0 x x x 11.2 77.3 593.4 682.0 641.4 1 188.9 1 781.1 2 769.9 5 740.0 5 521.6
16.a
Investment funds, excluding money market funds, and alternative
investment funds
Other financial institutions
Up to 1 year In euro Up to 1 year 1–5 years Over 5 years In euro
2016
I 0.1 0.1 0.0 206.2 355.0 108.9 670.1 628.5
II 0.0 0.0 0.0 216.1 356.9 107.5 680.6 637.5
III 0.0 0.0 0.0 210.6 355.7 382.2 948.5 911.3
IV 0.0 0.0 0.0 213.8 353.7 386.5 954.0 915.2
V 0.0 0.0 0.0 220.4 360.6 389.6 970.6 947.0
VI 0.0 0.0 0.0 230.8 358.9 394.9 984.5 961.9
VII 0.0 0.0 0.0 231.5 353.7 404.3 989.5 967.8
VIII 0.0 0.0 0.0 230.6 361.5 410.4 1 002.5 981.3
IX 0.0 0.0 0.0 364.7 249.4 410.2 1 024.3 997.9
X 0.0 0.0 0.0 364.3 238.9 414.3 1 017.5 990.8
XI 0.0 0.0 0.0 369.9 241.2 419.2 1 030.2 1 001.8
XII 0.0 0.0 0.0 373.3 241.4 414.9 1 029.6 999.7
2017
I 0.0 0.0 0.0 374.4 241.3 432.2 1 047.9 1 018.5
II 0.0 0.0 0.0 374.8 239.9 434.4 1 049.0 1 017.2
III 0.0 0.0 0.0 381.4 232.5 433.5 1 047.3 1 019.1

71
LOANS TO HOUSEHOLDS
Households
Consumer credit Lending for house purchase Other lending In euro
Up to
1 year
1–5 years Over
5 years
Up to
1 year
1–5 years Over
5 years
Up to
1 year
1–5 years Over
5 years
2016
I 455.9 133.1 156.6 166.2 4 484.8 104.0 81.3 4 299.4 434.8 70.2 54.8 309.8 5 375.5 5 214.6
II 457.7 132.0 158.6 167.1 4 471.9 103.1 81.6 4 287.2 432.9 69.0 56.8 307.1 5 362.6 5 201.2
III 463.2 131.5 162.0 169.7 4 453.6 96.8 80.2 4 276.6 423.1 64.2 55.1 303.9 5 339.9 5 183.9
IV 463.0 130.0 165.1 167.9 4 454.6 94.9 82.9 4 276.7 418.6 62.8 52.7 303.0 5 336.1 5 182.2
V 471.6 131.7 171.1 168.8 4 450.6 93.1 82.0 4 275.5 416.2 61.8 52.5 301.9 5 338.4 5 184.4
VI 473.8 129.3 175.3 169.2 4 440.4 96.5 82.4 4 261.5 419.8 62.5 53.3 304.0 5 334.0 5 180.8
VII 478.4 128.8 180.7 168.9 4 431.2 93.0 82.9 4 255.2 415.2 62.4 50.5 302.3 5 324.7 5 174.4
VIII 483.8 129.9 183.8 170.0 4 421.8 90.1 83.3 4 248.4 415.1 64.1 50.4 300.6 5 320.7 5 172.9
IX 485.3 128.2 186.5 170.6 4 415.0 87.8 83.2 4 244.0 412.2 63.4 50.5 298.3 5 312.6 5 166.2
X 489.6 128.5 188.9 172.2 4 420.8 86.3 84.7 4 249.7 417.4 62.1 50.3 305.0 5 327.8 5 182.5
XI 493.1 129.1 190.4 173.7 4 418.8 80.5 84.9 4 253.4 413.9 59.9 51.2 302.9 5 325.9 5 179.9
XII 487.3 124.3 192.3 170.6 4 411.8 72.6 83.5 4 255.7 405.6 55.8 49.5 300.3 5 304.7 5 159.4
2017
I 494.4 126.8 195.3 172.2 4 402.9 73.0 82.6 4 247.3 402.2 53.3 49.1 299.8 5 299.5 5 157.1
II 474.2 128.7 203.6 141.9 4 407.0 102.4 73.0 4 231.6 409.6 36.9 41.6 331.1 5 290.8 5 149.0
III 481.7 131.1 207.4 143.2 4 394.6 98.8 71.4 4 224.4 406.6 35.4 42.7 328.5 5 282.8 5 143.4
16.b
LOANS TO GOVERNMENT AND NON-RESIDENTS
General government Non-residents
Central
government
Local
government
In euro MFIs Non-MFIs In euro
General
government
Other
2016
I 91.9 35.2 127.1 91.3 5 038.9 2 140.3 0.0 2 140.3 7 179.3 2 530.1
II 91.3 34.7 126.0 90.4 4 843.7 2 163.4 0.0 2 163.4 7 007.1 2 477.4
III 90.6 34.2 124.8 89.2 4 687.7 2 082.8 0.0 2 082.8 6 770.5 2 515.9
IV 89.7 33.9 123.7 88.1 4 165.5 2 111.1 0.0 2 111.1 6 276.7 2 281.6
V 90.0 29.9 120.0 85.2 4 191.6 2 135.5 0.0 2 135.5 6 327.2 2 527.6
VI 87.2 29.8 116.9 82.9 4 908.4 2 213.9 0.0 2 213.9 7 122.3 2 672.8
VII 85.6 29.7 115.3 82.1 4 241.5 2 237.7 0.0 2 237.7 6 479.2 2 454.6
VIII 85.2 30.1 115.3 82.2 4 193.7 2 240.5 0.0 2 240.5 6 434.2 2 428.4
IX 81.3 33.6 114.9 82.5 3 622.1 2 214.0 0.0 2 214.0 5 836.1 2 283.1
X 79.6 29.7 109.3 78.0 4 059.8 2 195.9 0.0 2 195.9 6 255.7 2 638.2
XI 79.5 33.2 112.6 81.3 3 810.0 2 239.8 0.0 2 239.8 6 049.8 2 494.9
XII 79.6 29.2 108.8 77.1 3 276.3 2 230.2 0.0 2 230.2 5 506.4 2 209.6
2017
I 82.0 29.1 111.1 79.3 3 659.0 2 187.8 0.0 2 187.8 5 846.8 2 391.8
II 82.7 28.9 111.5 80.5 3 821.2 2 195.4 0.0 2 195.4 6 016.6 2 455.1
III 82.2 28.3 110.5 79.6 3 729.5 2 202.9 0.0 2 202.9 5 932.4 2 402.2
16.c

72
LOANS TO FINANCIAL INSTITUTIONS AND NON-FINANCIAL CORPORATIONS IN THE NATIONAL ECONOMY
(at end of Q4 2016, millions of euro; structure, %)
With residual maturity of up to
1 year
With residual maturity of over
1 and up to 5 years
5 years
Total loans
Amount % Of which
in euro
% Amount % Of which
in euro
% Amount % Of which
in euro
% Amount % Of which
in euro
%
2 195.6 100.0 2 000.6 100.0 4 137.6 100.0 4 063.0 100.0 1 102.8 100.0 1 042.0 100.0 7 436.0 100.0 7 105.6 100.0Total
A Agriculture, forestry and
fishing 157.8 7.2 136.8 6.8 275.2 6.7 273.7 6.7 62.3 5.6 62.3 6.0 495.4 6.7 472.8 6.7
B Mining and quarrying 7.5 0.4 7.5 0.4 8.4 0.2 8.4 0.2 1.4 0.1 1.4 0.1 17.4 0.2 17.3 0.2
C Manufacturing 260.1 11.9 251.5 12.6 455.6 11.0 446.9 11.0 91.8 8.3 91.8 8.8 807.6 10.9 790.2 11.1
D Electricity, gas, steam
and air conditioning
supply 50.8 2.3 50.8 2.5 360.4 8.7 360.4 8.9 91.0 8.3 91.0 8.7 502.2 6.8 502.2 7.1
E Water supply; sewerage,
waste management and
remediation activities 4.0 0.2 4.0 0.2 29.8 0.7 29.8 0.7 49.6 4.5 49.6 4.8 83.4 1.1 83.4 1.2
F Construction 44.2 2.0 44.2 2.2 134.5 3.2 118.8 2.9 93.4 8.5 65.1 6.2 272.0 3.7 228.1 3.2
G Wholesale and retail
trade; repair of motor
vehicles and motorcycles 391.1 17.8 338.3 16.9 235.0 5.7 231.0 5.7 24.9 2.3 24.9 2.4 651.0 8.8 594.2 8.4
H Transportation and
storage 77.7 3.5 67.0 3.4 268.5 6.5 245.9 6.1 255.5 23.2 255.5 24.5 601.6 8.1 568.4 8.0
I Accommodation and
food service activities 24.4 1.1 24.4 1.2 113.2 2.7 113.2 2.8 12.5 1.1 12.5 1.2 150.1 2.0 150.1 2.1
J Information and
communication 6.4 0.3 6.4 0.3 64.7 1.6 63.8 1.6 2.1 0.2 2.1 0.2 73.1 1.0 72.3 1.0
K Financial and insurance
activities 243.2 11.1 203.4 10.2 553.7 13.4 541.3 13.3 32.3 2.9 31.7 3.0 829.2 11.1 776.4 10.9
L Real estate activities 518.3 23.6 482.9 24.1 1 434.2 34.7 1 425.5 35.1 297.0 26.9 265.1 25.4 2 249.6 30.2 2 173.5 30.6
M Professional, scientific
and technical activities 4.7 0.2 4.7 0.2 8.7 0.2 8.7 0.2 4.4 0.4 4.4 0.4 17.8 0.2 17.8 0.2
N Administrative and
support service activities 358.4 16.3 331.9 16.6 38.7 0.9 38.7 1.0 3.1 0.3 3.1 0.3 400.1 5.4 373.7 5.3
O Public administration
and defence; compulsory
social security 0.3 0.0 0.3 0.0 9.5 0.2 9.5 0.2 18.7 1.7 18.7 1.8 28.5 0.4 28.5 0.4
P Education 0.6 0.0 0.6 0.0 31.4 0.8 31.4 0.8 0.6 0.1 0.6 0.1 32.6 0.4 32.6 0.5
Q Human health and social
work activities 5.0 0.2 5.0 0.3 12.2 0.3 12.2 0.3 4.7 0.4 4.7 0.5 21.9 0.3 21.9 0.3
R Arts, entertainment and
recreation 3.6 0.2 3.3 0.2 9.6 0.2 9.6 0.2 3.7 0.3 3.7 0.4 16.9 0.2 16.6 0.2
S Other service activities 37.6 1.7 37.6 1.9 94.2 2.3 94.2 2.3 53.8 4.9 53.8 5.2 185.6 2.5 185.6 2.6
17.a

73
LOANS TO FINANCIAL INSTITUTIONS AND NON-FINANCIAL CORPORATIONS IN THE NATIONAL ECONOMY
(at end of Q1 2017, millions of euro; structure, %)
With residual maturity of up to
1 year
1 and up to 5 years
5 years
Total loans
Amount % Of which
in euro
% Amount % Of which
in euro
% Amount % Of which
in euro
% Amount % Of which
in euro
%
2 165.3 100.0 1 980.1 100.0 4 087.6 100.0 4 013.2 100.0 1 003.6 100.0 945.9 100.0 7 256.5 100.0 6 939.2 100.0Total
A Agriculture, forestry and
fishing 169.8 7.9 148.2 7.5 270.6 6.6 269.5 6.7 63.3 6.3 63.3 6.7 503.7 6.9 481.0 6.9
B Mining and quarrying 7.1 0.3 7.1 0.4 8.1 0.2 8.1 0.2 1.4 0.1 1.4 0.1 16.7 0.2 16.6 0.2
C Manufacturing 283.4 13.1 278.3 14.1 433.0 10.6 420.4 10.5 86.1 8.6 86.1 9.1 802.5 11.1 784.8 11.3
D Electricity, gas, steam
and air conditioning
supply 46.0 2.1 46.0 2.3 371.7 9.1 371.8 9.3 103.2 10.3 103.2 10.9 521.0 7.2 521.0 7.5
E Water supply; sewerage,
waste management and
remediation activities 6.3 0.3 6.3 0.3 43.5 1.1 43.5 1.1 13.8 1.4 13.8 1.5 63.6 0.9 63.6 0.9
F Construction 51.2 2.4 51.2 2.6 128.2 3.1 113.8 2.8 65.5 6.5 39.4 4.2 244.9 3.4 204.4 3.0
G Wholesale and retail
trade; repair of motor
vehicles and
motorcycles 383.7 17.7 326.3 16.5 287.7 7.0 283.6 7.1 23.6 2.4 23.6 2.5 695.0 9.6 633.5 9.1
H Transportation and
storage 75.3 3.5 65.9 3.3 276.5 6.8 257.1 6.4 259.7 25.9 259.7 27.4 611.5 8.4 582.7 8.4
I Accommodation and
food service activities 28.4 1.3 19.4 1.0 107.4 2.6 107.4 2.7 2.3 0.2 2.3 0.2 138.1 1.9 129.1 1.9
J Information and
communication 19.4 0.9 8.5 0.4 64.3 1.6 63.5 1.6 12.6 1.2 12.6 1.3 96.3 1.3 84.6 1.2
K Financial and insurance
activities 560.0 25.9 521.1 26.3 362.0 8.9 350.0 8.7 32.3 3.2 31.7 3.3 954.3 13.2 902.8 13.0
L Real estate activities 489.6 22.6 457.3 23.1 1 534.7 37.5 1 524.5 38.0 238.1 23.7 207.0 21.9 2 262.4 31.2 2 188.8 31.6
M Professional, scientific
and technical activities 5.0 0.2 5.0 0.2 15.9 0.4 15.9 0.4 4.4 0.4 4.4 0.5 25.3 0.3 25.3 0.4
N Administrative and
support service
activities 6.1 0.3 6.1 0.3 28.5 0.7 28.5 0.7 2.9 0.3 2.9 0.3 37.5 0.5 37.5 0.5
O Public administration
and defence;
compulsory social
security 0.0 0.0 0.0 0.0 2.9 0.1 3.0 0.1 7.2 0.7 7.2 0.8 10.2 0.1 10.2 0.2
P Education 0.8 0.0 0.8 0.0 33.4 0.8 33.4 0.8 0.7 0.1 0.7 0.1 34.9 0.5 34.9 0.5
Q Human health and
social work activities 5.1 0.2 5.1 0.3 14.3 0.4 14.3 0.3 1.7 0.2 1.7 0.2 21.0 0.3 21.1 0.3
R Arts, entertainment and
recreation 2.6 0.1 2.3 0.1 9.1 0.2 9.1 0.2 3.7 0.4 3.7 0.4 15.3 0.2 15.1 0.2
S Other service activities 25.4 1.2 25.2 1.3 95.8 2.3 95.8 2.4 81.2 8.1 81.2 8.6 202.4 2.8 202.2 2.9
17.b
LENDING TO RESIDENT FINANCIAL INSTITUTIONS, NON-FINANCIAL CORPORATIONS AND HOUSEHOLDS
20172016
III VI IX1
XII III
Commercial credit 2 469.1 2 540.8 2 659.1 2 623.3 2 669.0
Industrial credit 2 081.2 2 214.2 1 346.8 1 311.5 1 292.5
Reverse repo 1.7 1.5 1.7 0.3 0.5
Financial leasing 56.8 59.1 61.1 64.0 67.9
Consumer credit 356.5 370.9 313.1 320.1 334.8
Mortgage loans 6 310.2 6 240.0 6 693.6 6 666.3 6 658.3
Factoring 1.3 1.2 1.1 1.3 1.2
Other credit 1 117.3 1 201.1 1 646.9 1 726.2 1 722.9
Total loans 12 394.0 12 628.8 12 723.5 12 713.0 12 747.1
1
18.

74
HOLDINGS OF SHARES AND OTHER EQUITY
Shares and other equity
MFIs Other residents Non-residents In euro
2016
I 0.0 594.2 296.4 890.6 838.5
II 0.0 600.1 298.3 898.4 847.0
III 0.0 603.7 281.4 885.2 835.5
IV 0.0 603.6 288.6 892.2 842.6
V 0.0 606.0 288.2 894.1 843.6
VI 0.0 607.3 204.4 811.7 755.0
VII 0.0 601.1 206.1 807.2 742.1
VIII 0.0 608.6 208.0 816.6 750.8
IX 0.0 594.9 212.5 807.4 740.8
X 0.0 596.2 215.8 812.1 743.5
XI 0.0 597.5 214.9 812.4 741.8
XII 0.0 612.0 211.3 823.3 756.5
2017
I 0.0 618.2 209.2 827.4 761.6
II 0.0 618.6 211.9 830.5 762.2
III 0.0 611.9 208.6 820.6 757.7
19.b
HOLDINGS OF SECURITIES OTHER THAN SHARES
Securities other than shares
MFIs General government Other residents Non-residents In euro
incl. long-term incl. long-term incl. long-term incl. long-term
2016
I 0.0 0.0 864.4 754.6 20.6 20.6 5 184.4 4 637.8 6 069.3 1 404.8
II 0.0 0.0 881.7 801.7 20.4 20.4 5 116.9 4 708.1 6 019.1 1 278.8
III 0.0 0.0 929.4 799.4 20.4 20.4 4 880.1 4 534.8 5 830.0 1 350.7
IV 0.0 0.0 939.2 809.2 22.5 22.5 4 802.6 4 533.8 5 764.2 1 341.4
V 0.0 0.0 956.3 826.3 22.3 22.3 4 487.9 4 313.4 5 466.5 1 245.5
VI 0.0 0.0 974.8 844.8 22.1 22.1 4 469.7 4 159.4 5 466.6 1 394.3
VII 0.0 0.0 808.0 808.0 22.4 22.4 4 301.3 4 015.7 5 131.6 1 218.5
VIII 0.0 0.0 829.6 829.6 21.1 21.1 4 159.3 3 930.8 5 009.9 1 170.9
IX 0.0 0.0 845.7 845.7 21.1 21.1 4 130.6 3 922.4 4 997.3 1 262.1
X 0.0 0.0 904.4 904.4 20.9 20.9 3 902.3 3 701.6 4 827.6 1 317.4
XI 0.0 0.0 944.7 944.7 20.7 20.7 3 872.9 3 695.8 4 838.3 1 304.1
XII 14.5 14.5 977.0 977.0 21.1 21.1 3 891.5 3 738.9 4 904.0 1 316.3
2017
I 8.7 8.7 980.4 980.4 21.1 21.1 3 750.1 3 623.6 4 760.3 1 269.1
II 8.6 8.6 739.7 739.7 21.0 21.0 3 751.5 3 629.0 4 520.8 1 248.9
III 7.5 7.5 775.3 775.3 21.5 21.5 3 699.4 3 574.7 4 503.7 1 241.9
19.a

75
CURRENCY BREAKDOWN OF RESIDENT DEPOSITS
(at end of period)
MFIs Non-MFIs
Outstanding
amount (all
currencies;
millions of
euro)
Structure (%) Outstanding
amount (all
currencies;
millions of
euro)
Structure (%)
In euro In foreign currencies In euro In foreign currencies
incl. USD incl. JPY incl. CHF incl. GBP incl. USD incl. JPY incl. CHF incl. GBP
2016
I 421.8 72.0 28.0 23.3 0.0 0.3 2.8 10 745.0 88.3 11.7 9.5 0.1 0.1 0.9
II 436.0 67.4 32.6 28.0 0.0 0.2 3.1 11 135.4 88.0 12.0 9.9 0.2 0.1 0.8
III 387.1 77.6 22.4 17.8 0.0 0.2 3.0 11 099.1 88.8 11.2 9.1 0.1 0.1 0.9
IV 385.6 78.3 21.7 16.8 0.0 0.1 3.6 11 201.1 88.6 11.4 9.4 0.0 0.1 0.8
V 381.7 72.9 27.1 22.3 0.0 0.1 3.4 11 643.4 88.3 11.7 9.7 0.0 0.1 0.8
VI 380.8 71.2 28.8 25.8 0.0 0.1 1.6 11 673.5 88.5 11.5 9.7 0.0 0.1 0.7
VII 354.2 76.4 23.6 20.4 0.1 0.2 1.9 11 376.9 88.1 11.9 10.0 0.0 0.2 0.8
VIII 354.9 75.2 24.8 21.4 0.1 0.2 2.2 11 576.8 88.2 11.8 10.0 0.0 0.1 0.7
IX 371.6 75.8 24.2 21.4 0.0 0.2 2.4 11 660.5 88.2 11.8 9.9 0.0 0.1 0.8
X 348.1 77.9 22.1 19.7 0.1 0.1 1.9 12 128.3 89.0 11.0 9.3 0.0 0.1 0.6
XI 351.7 76.2 23.8 21.5 0.1 0.2 1.4 12 141.3 89.0 11.0 9.2 0.0 0.1 0.6
XII 344.6 78.6 21.4 17.7 0.0 0.2 1.5 12 225.7 88.6 11.4 9.7 0.0 0.2 0.6
2017
I 379.2 73.1 26.9 25.3 0.0 0.2 0.9 12 057.7 88.6 11.4 9.7 0.0 0.1 0.6
II 354.8 73.4 26.6 25.7 0.0 0.1 0.2 12 169.8 88.6 11.4 9.6 0.0 0.1 0.6
III 354.8 74.0 26.0 24.9 0.0 0.2 0.3 12 020.8 88.7 11.3 9.6 0.0 0.1 0.7
20.a
CURRENCY BREAKDOWN OF NON-RESIDENT DEPOSITS
(at end of period)
MFIs Non-MFIs
Outstanding
amount (all
currencies;
millions of
euro)
amount (all
currencies;
millions of
euro)
Structure (%)
2016
I 3 098.0 84.1 15.9 8.3 0.1 1.8 1.7 11 907.1 27.9 72.1 68.2 0.1 0.4 1.7
II 2 870.9 85.4 14.6 6.4 0.0 2.0 1.7 11 719.4 28.3 71.7 67.5 0.1 0.4 1.8
III 2 928.8 86.5 13.5 5.7 0.1 2.0 1.6 10 984.6 30.2 69.8 65.4 0.1 0.4 1.9
IV 2 965.2 86.6 13.4 5.5 0.0 1.9 1.5 10 602.7 30.1 69.9 65.4 0.1 0.4 2.0
V 2 977.0 88.4 11.6 5.1 0.0 2.1 0.2 10 322.7 30.7 69.3 64.8 0.1 0.4 2.0
VI 2 992.2 87.3 12.7 6.2 0.0 2.1 0.2 10 354.0 30.2 69.8 64.2 0.1 0.4 1.9
VII 3 214.1 88.3 11.7 5.6 0.0 2.1 0.2 10 014.8 31.1 68.9 63.9 0.1 0.4 1.9
VIII 3 065.7 87.4 12.6 6.5 0.0 1.8 0.2 9 772.2 31.4 68.6 63.2 0.1 0.3 2.0
IX 3 008.7 87.5 12.5 6.4 0.0 1.8 0.2 9 467.0 31.9 68.1 62.9 0.1 0.3 2.2
X 2 971.8 89.2 10.8 5.5 0.0 1.9 0.2 9 542.4 32.6 67.4 62.5 0.1 0.3 1.9
XI 2 869.6 88.5 11.5 6.0 0.0 1.9 0.2 9 509.6 33.0 67.0 61.4 0.1 0.3 1.9
XII 2 836.4 86.8 13.2 7.1 0.0 2.3 0.1 8 890.3 34.4 65.6 60.7 0.1 0.3 1.9
2017
I 3 040.9 87.0 13.0 7.7 0.0 1.8 0.2 8 815.4 34.0 66.0 60.7 0.1 0.3 1.9
II 2 913.6 86.4 13.6 7.7 0.0 2.0 0.4 8 787.5 34.0 66.0 60.7 0.1 0.3 2.0
III 2 923.0 87.4 12.6 6.4 0.0 2.0 0.5 8 710.1 33.9 66.1 60.8 0.0 0.3 2.0
20.b

76
CURRENCY BREAKDOWN OF LOANS TO RESIDENTS
(at end of period)
Non-MFIs
Outstanding amount
(all currencies;
millions of euro)
Structure (%)
In euro In foreign currencies
incl. USD incl. JPY incl. CHF incl. GBP
2016
I 12 400.2 95.3 4.7 2.7 0.0 0.6 0.5
II 12 390.8 95.2 4.8 2.7 0.0 0.6 0.5
III 12 524.6 95.7 4.3 2.3 0.0 0.6 0.4
IV 12 583.8 95.8 4.2 2.2 0.0 0.6 0.5
V 12 731.2 96.1 3.9 2.4 0.0 0.6 0.0
VI 12 746.9 96.2 3.8 2.2 0.0 0.6 0.0
VII 12 768.0 96.4 3.6 2.1 0.0 0.6 0.0
VIII 12 798.8 96.3 3.7 2.3 0.0 0.6 0.0
IX 12 819.3 96.1 3.9 2.4 0.0 0.6 0.0
X 12 800.0 96.2 3.8 2.5 0.0 0.6 0.0
XI 12 853.2 96.2 3.8 2.5 0.0 0.5 0.0
XII 12 818.7 96.3 3.7 2.4 0.0 0.5 0.0
2017
I 12 846.5 96.3 3.7 2.4 0.0 0.5 0.0
II 12 847.7 96.3 3.7 2.5 0.0 0.5 0.0
III 12 862.5 96.4 3.6 2.3 0.0 0.5 0.0
20.c
CURRENCY BREAKDOWN OF LOANS TO NON-RESIDENTS
(at end of period)
MFIs Non-MFIs
Outstanding
amount (all
currencies;
millions of
euro)
amount (all
currencies;
millions of
euro)
Structure (%)
2016
I 5 038.9 35.7 64.3 53.7 0.5 1.8 4.2 2 140.3 34.2 65.8 64.1 0.0 0.1 1.1
II 4 843.7 36.0 64.0 53.0 0.6 1.8 4.4 2 163.4 33.9 66.1 64.4 0.0 0.1 1.1
III 4 687.7 38.9 61.1 44.9 1.8 5.3 4.6 2 082.8 33.3 66.7 64.8 0.0 0.2 1.2
IV 4 165.5 36.3 63.7 51.2 0.3 3.3 3.9 2 111.1 36.5 63.5 61.9 0.0 0.1 1.0
V 4 191.6 41.8 58.2 45.9 0.3 3.1 4.1 2 135.5 36.3 63.7 62.0 0.0 0.1 1.1
VI 4 908.4 38.2 61.8 44.0 0.4 8.5 4.3 2 213.9 36.0 64.0 59.3 0.0 0.1 1.0
VII 4 241.5 38.6 61.4 47.6 0.2 5.3 4.1 2 237.7 36.6 63.4 58.9 0.0 0.1 1.0
VIII 4 193.7 38.4 61.6 43.5 0.2 9.1 4.2 2 240.5 36.4 63.6 58.9 0.0 0.1 1.1
IX 3 622.1 40.7 59.3 42.3 1.0 4.9 5.6 2 214.0 36.6 63.4 58.9 0.0 0.1 0.8
X 4 059.8 45.4 54.6 42.3 0.9 2.6 4.1 2 195.9 36.2 63.8 59.1 0.0 0.1 1.0
XI 3 810.0 44.5 55.5 42.1 0.5 2.2 4.6 2 239.8 35.8 64.2 59.4 0.0 0.1 1.1
XII 3 276.3 42.5 57.5 44.1 0.7 2.6 4.9 2 230.2 36.6 63.4 58.3 0.0 0.1 1.2
2017
I 3 659.0 43.8 56.2 43.1 0.3 1.7 5.2 2 187.8 36.1 63.9 58.8 0.0 0.1 1.1
II 3 821.2 43.9 56.1 41.9 0.8 2.0 4.6 2 195.4 35.3 64.7 59.3 0.0 0.1 1.2
III 3 729.5 42.6 57.4 41.3 1.3 1.6 5.7 2 202.9 37.0 63.0 57.1 0.0 0.1 1.5
20.d

77
CURRENCY BREAKDOWN OF HOLDINGS OF NON-RESIDENT SECURITIES OTHER THAN SHARES
(at end of period)
MFIs Non-MFIs
Outstanding
amount (all
currencies;
millions of
euro)
amount (all
currencies;
millions of
euro)
Structure (%)
2016
I 1 343.8 17.9 82.1 81.3 0.0 0.0 0.0 3 840.6 14.7 85.3 84.0 0.1 0.1 0.7
II 1 371.1 17.1 82.9 82.2 0.0 0.0 0.0 3 745.8 11.8 88.2 86.8 0.3 0.1 0.7
III 1 339.6 17.4 82.6 82.0 0.0 0.0 0.0 3 540.5 13.1 86.9 83.7 1.0 0.1 0.9
IV 1 370.5 17.1 82.9 81.2 0.0 0.0 0.9 3 432.1 12.9 87.1 84.0 1.1 0.1 0.8
V 1 389.4 16.7 83.3 81.9 0.0 0.0 0.9 3 098.5 11.4 88.6 86.1 1.2 0.1 0.9
VI 1 357.0 16.8 83.2 81.8 0.0 0.0 0.9 3 112.7 15.9 84.1 80.7 1.3 0.1 0.8
VII 1 329.8 17.0 83.0 81.6 0.0 0.0 0.9 2 971.5 16.3 83.7 80.0 1.4 0.1 1.0
VIII 1 340.1 17.0 83.0 81.6 0.0 0.0 0.9 2 819.2 14.8 85.2 82.3 0.2 0.1 1.2
IX 1 326.2 18.8 81.2 79.6 0.0 0.0 1.0 2 804.3 17.1 82.9 80.6 0.0 0.1 0.8
X 1 268.6 19.6 80.4 78.6 0.0 0.0 1.1 2 633.7 18.3 81.7 79.5 0.0 0.1 0.7
XI 1 248.6 16.8 83.2 81.0 0.0 0.0 1.3 2 624.3 18.2 81.8 79.4 0.0 0.1 0.7
XII 1 280.3 16.3 83.7 81.6 0.0 0.0 1.3 2 611.1 17.1 82.9 80.6 0.0 0.1 0.6
2017
I 1 263.6 17.7 82.3 80.3 0.0 0.0 1.3 2 486.5 15.2 84.8 82.5 0.0 0.2 0.6
II 1 233.8 14.5 85.5 83.4 0.0 0.0 1.4 2 517.7 14.8 85.2 82.9 0.0 0.2 0.6
III 1 180.5 13.7 86.3 84.1 0.0 0.0 1.4 2 518.9 14.6 85.4 84.2 0.0 0.2 0.6
20.f
CURRENCY BREAKDOWN OF HOLDINGS OF RESIDENT SECURITIES OTHER THAN SHARES
(at end of period)
MFIs Non-MFIs
Outstanding
amount (all
currencies;
millions of
euro)
amount (all
currencies;
millions of
euro)
Structure (%)
2016
I 0.0 0.0 0.0 0.0 0.0 0.0 0.0 884.9 67.7 32.3 32.3 0.0 0.0 0.0
II 0.0 0.0 0.0 0.0 0.0 0.0 0.0 902.2 67.0 33.0 32.9 0.0 0.0 0.0
III 0.0 0.0 0.0 0.0 0.0 0.0 0.0 949.8 68.9 31.1 31.1 0.0 0.0 0.0
IV 0.0 0.0 0.0 0.0 0.0 0.0 0.0 961.6 69.1 30.9 30.9 0.0 0.0 0.0
V 0.0 0.0 0.0 0.0 0.0 0.0 0.0 978.6 67.6 32.4 32.4 0.0 0.0 0.0
VI 0.0 0.0 0.0 0.0 0.0 0.0 0.0 996.9 67.5 32.5 32.5 0.0 0.0 0.0
VII 0.0 0.0 0.0 0.0 0.0 0.0 0.0 830.3 61.1 38.9 38.9 0.0 0.0 0.0
VIII 0.0 0.0 0.0 0.0 0.0 0.0 0.0 850.6 61.8 38.2 38.2 0.0 0.0 0.0
IX 0.0 0.0 0.0 0.0 0.0 0.0 0.0 866.7 61.6 38.4 38.4 0.0 0.0 0.0
X 0.0 0.0 0.0 0.0 0.0 0.0 0.0 925.4 63.4 36.6 36.6 0.0 0.0 0.0
XI 0.0 0.0 0.0 0.0 0.0 0.0 0.0 965.3 63.9 36.1 36.1 0.0 0.0 0.0
XII 14.5 100.0 0.0 0.0 0.0 0.0 0.0 998.0 64.8 35.2 35.2 0.0 0.0 0.0
2017
I 8.7 100.0 0.0 0.0 0.0 0.0 0.0 1 001.5 65.9 34.1 34.1 0.0 0.0 0.0
II 8.6 100.0 0.0 0.0 0.0 0.0 0.0 760.7 90.5 9.5 9.5 0.0 0.0 0.0
III 7.5 100.0 0.0 0.0 0.0 0.0 0.0 796.8 88.3 11.7 11.7 0.0 0.0 0.0
20.e

78
CURRENCY BREAKDOWN OF DEBT SECURITIES ISSUED BY MFIs
(at end of period)
Outstanding amount (all currencies; millions of euro) Structure (%)
2016
I 685.5 32.3 67.7
II 699.7 31.3 68.7
III 682.9 32.0 68.0
IV 685.2 32.5 67.5
V 691.3 32.2 67.8
VI 703.0 31.8 68.2
VII 689.8 31.0 69.0
VIII 687.5 31.1 68.9
IX 685.6 31.3 68.7
X 656.9 31.1 68.9
XI 687.9 31.2 68.8
XII 710.1 33.3 66.7
2017
I 698.6 33.9 66.1
II 682.4 33.0 67.0
III 701.4 32.7 67.3
20.g
WEIGHTED AVERAGE INTEREST RATES CHARGED BY MFIs IN TRANSACTIONS WITH RESIDENT NON-FINANCIAL
CORPORATIONS AND HOUSEHOLDS IN EURO
(%)
1. Interest rates on deposits (new business)
2016 2017
Deposits from households
Overnight1
0.05 0.06 0.06 0.05 0.05 0.06 0.05 0.05 0.04 0.01 0.01 0.01 0.01 0.01 0.01
With agreed maturity
Up to 1 year 0.38 0.23 0.34 0.33 0.36 0.38 0.34 0.25 0.34 0.36 0.33 0.50 0.48 0.29 0.27
Over 1 and up to 2 years 1.13 1.05 1.15 0.99 0.89 1.24 1.19 0.97 1.09 1.00 0.76 1.07 0.92 0.73 1.12
Over 2 years 1.68 1.94 1.71 1.26 1.40 2.96 1.77 1.65 1.52 1.58 1.68 1.41 1.52 1.52 1.32
Redeemable at notice2
Up to 3 months 0.07 0.07 0.07 0.07 0.06 0.06 0.06 0.06 0.06 0.07 0.06 0.07 0.06 0.05 0.05
Over 3 months x x 7.18 7.16 7.13 6.87 6.88 x x x x x x 2.55 2.55
Deposits from non-financial corporations
Overnight1
0.04 0.04 0.04 0.04 0.06 0.04 0.04 0.03 0.04 0.01 0.01 0.01 0.01 0.01 0.00
Up to 1 year 0.01 0.01 0.04 0.01 0.03 0.02 0.01 0.08 0.02 0.07 0.02 0.07 0.04 0.01 0.03
Over 1 and up to 2 years 0.48 1.49 0.52 1.05 0.89 – x 1.33 1.40 1.07 0.35 1.42 x x x
Over 2 years 0.45 x x 0.57 0.95 0.41 x x 0.64 0.70 x 1.56 x x x
Repos – – – – – – – – – – – – – – –
1
End-of-period.
2
For this instrument category, households and non-financial corporations are merged and allocated to the household sector.
21.a

79
CORPORATIONS AND HOUSEHOLDS IN EURO (CONT.)
(%)
21.a
2. Interest rates on deposits (outstanding amounts)
2016 2017
Households
Overnight1
0.05 0.06 0.06 0.05 0.05 0.06 0.05 0.05 0.04 0.01 0.01 0.01 0.01 0.01 0.01
Up to 2 years 0.79 0.79 0.78 0.78 0.78 0.79 0.80 0.81 0.80 0.80 0.79 0.79 0.79 0.78 0.75
Over 2 years 2.50 2.49 2.39 2.38 2.38 2.40 2.41 2.42 2.39 2.36 2.31 2.30 2.26 2.27 2.27
Up to 3 months 0.07 0.07 0.07 0.07 0.06 0.06 0.06 0.06 0.06 0.07 0.06 0.07 0.06 0.05 0.05
Over 3 months x x 7.18 7.16 7.13 6.87 6.88 x x x x x x 2.55 2.57
Non-financial corporations
Overnight1
0.04 0.04 0.04 0.04 0.06 0.04 0.04 0.03 0.04 0.01 0.01 0.01 0.01 0.01 0.00
Up to 2 years 0.24 0.23 0.21 0.21 0.21 0.19 0.20 0.21 0.21 0.20 0.17 0.17 0.13 0.13 0.13
Over 2 years 1.36 1.28 1.18 1.10 1.25 1.24 1.23 1.18 1.17 1.18 1.18 1.20 0.76 0.77 0.85
Repos – – – – – – – – – – – – – – –
1
End-of-period.
2

80
(%)
21.a
1
End-of-period.
2
The annual percentage rate of charge (APRC) covers the total cost of a loan. The total cost comprises an interest rate component and a component of other (related) charges, such as
the cost of inquiries, administration, preparation of documents, guarantees, etc.
3. Interest rates on loans to households (new business)
2016 2017
Bank overdraft1
– – – – – – – – – – – – – – –
Revolving loans and overdraft1
17.11 17.19 18.03 17.95 18.06 17.69 17.83 17.74 17.45 17.52 17.07 17.49 18.47 18.02 17.98
Extended credit card credit1
23.19 23.21 23.15 23.13 23.15 23.17 23.14 23.15 23.16 23.15 23.12 23.10 23.08 22.73 22.74
Lending for house purchase
By initial rate fixation
Floating rate and up to 1 year 2.81 2.73 2.68 2.70 2.62 2.60 2.63 2.54 2.55 2.48 2.49 2.49 2.42 2.43 2.44
of wich with collateral or
guarantees 2.87 2.76 2.72 2.67 2.67 2.64 2.74 2.56 2.61 2.49 2.52 2.59 2.47 2.52 2.55
guarantees 4.18 3.67 3.28 3.64 3.98 3.77 3.43 3.64 3.59 3.69 3.56 3.04 4.75 3.34 3.39
guarantees 9.00 7.81 x 9.41 9.81 7.40 8.69 5.55 x x x 6.69 7.65 8.75 8.30
Over 10 years 4.41 x 5.15 4.77 5.92 5.02 4.64 4.65 5.98 6.36 4.94 5.12 5.11 5.15 5.12
guarantees 4.13 x 5.13 4.54 5.92 5.60 4.74 4.64 5.98 6.71 4.94 4.97 5.29 5.14 5.27
Annual percentage rate of charge2
3.58 3.65 3.34 3.30 3.30 3.24 3.32 3.17 3.17 3.02 2.89 2.86 2.95 2.90 2.85
Consumer credit
guarantees 12.50 8.42 7.89 10.15 7.64 2.71 16.02 11.93 8.02 9.23 10.07 8.24 10.49 6.03 9.05
Over 1 year 20.49 19.32 18.51 18.31 17.79 18.13 18.65 17.19 17.47 16.69 16.71 15.84 16.71 17.42 16.11
guarantees 14.32 15.51 13.79 15.48 15.70 16.55 16.79 15.37 17.28 16.97 18.20 18.54 19.17 19.76 18.42
29.59 26.62 25.76 24.66 23.77 23.35 25.80 23.89 23.87 23.38 23.22 22.64 23.07 22.58 21.55
Other lending by initial rate fixation
Over 1 year 6.50 4.54 10.00 7.09 6.17 7.39 10.78 9.36 8.29 4.75 4.13 1.58 7.29 9.74 8.33

81
(%)
21.a
4. Interest rates on loans to non-financial corporations (new business)
2016 2017
I II III IV V VI I II IIIVII VIII IX X XI XII
Bank overdraft1
– – – – – – – – –– – – – – –
2.93 2.88 2.78 2.81 2.79 2.76 2.74 2.82 2.802.73 2.67 2.76 2.74 2.80 2.71
19.51 19.51 19.34 19.44 19.61 19.87 19.55 17.83 17.9019.39 19.31 19.45 19.52 19.60 19.55
Other loans up to 0.25 million euro by initial rate fixation
Floating rate and up to 1 year 4.25 4.40 4.08 4.40 4.24 4.20 4.20 3.84 3.574.39 4.29 4.33 4.51 4.61 4.25
guarantees 4.22 4.46 4.00 4.41 4.11 4.09 3.92 3.97 3.744.67 4.24 4.44 4.38 4.51 4.53
Over 1 year 8.69 6.37 6.45 5.08 6.18 6.40 7.01 6.31 7.745.54 7.04 6.01 4.26 5.45 3.33
guarantees 8.09 7.49 6.19 6.67 7.62 7.97 6.22 7.31 7.957.32 7.59 6.16 6.49 6.92 5.52
Other loans over 0.25 million euro and up to 1 million euro by initial rate fixation
guarantees 3.94 3.91 4.32 4.05 3.74 3.76 3.70 3.41 3.673.65 4.28 4.45 3.97 3.61 4.30
Over 1 year x 5.08 x x 5.11 x 4.04 3.02 3.91x 2.58 3.22 3.44 x 1.40
guarantees x x x x 5.11 x x 4.32 3.86x 2.45 x x x 2.38
Other loans over 1 million euro by initial rate fixation
guarantees 3.31 3.04 2.57 2.32 2.36 2.61 2.88 2.57 1.972.57 2.24 2.51 2.54 2.31 3.31
Over 1 year – 3.60 x 2.09 x 2.95 x x x5.70 2.53 2.31 x x 1.84
guarantees – x x 2.09 x x x x xx x 2.61 x x 2.83
1
End-of-period.

82
(%)
21.a
1
Including revolving loans, overdrafts, and extended and convenience credit card credit.
2
Including bank overdraft.
1
End-of-period.
2
CORPORATIONS AND HOUSEHOLDS IN US DOLLARS
(%)
21.b
5. Interest rates on loans (outstanding amounts)
2016 2017
Loans to households
Lending for house purchase, with
maturity
Up to 1 year 3.27 3.65 3.72 3.79 3.67 3.53 3.53 3.48 3.51 3.59 3.84 3.96 3.88 3.68 3.33
Over 5 years 2.29 2.28 2.26 2.25 2.23 2.23 2.23 2.22 2.22 2.21 2.21 2.20 2.20 2.20 2.20
Consumer credit and other loans,
with maturity1
Up to 1 year2
20.33 20.38 20.70 20.71 20.88 20.60 20.58 20.58 20.52 20.48 21.09 20.75 21.03 19.55 19.62
Over 5 years 6.17 6.20 6.27 6.30 6.31 6.26 6.28 6.30 6.31 6.30 6.31 6.22 6.25 6.91 6.93
Loans to non-financial corporations
With maturity1
Up to 1 year2
2.99 2.95 3.00 2.96 2.82 2.81 2.81 2.75 2.76 2.72 2.73 2.72 2.72 2.75 2.77
Over 5 years 2.44 2.42 2.38 2.36 2.31 2.30 2.29 2.26 2.25 2.25 2.25 2.26 2.25 2.22 2.22
1. Interest rates on deposits (new business)
2016 2017
Overnight1
0.26 0.25 0.25 0.26 0.25 0.25 0.29 0.27 0.290.26 0.27 0.27 0.25 0.26 0.26
Up to 1 year 0.48 0.47 0.44 0.41 0.42 0.87 0.72 0.70 0.910.47 0.47 0.54 0.53 0.58 0.76
Over 1 and up to 2 years 1.22 0.93 1.34 0.99 1.70 1.16 1.25 1.56 1.521.35 1.04 1.13 1.97 1.38 1.46
Over 2 years 2.22 1.95 2.66 1.61 1.77 3.59 1.87 3.05 1.823.32 2.55 2.29 2.53 3.09 2.10
Up to 3 months 0.14 0.14 0.14 0.14 0.14 0.14 0.14 0.15 0.160.14 0.14 0.15 0.15 0.14 0.14
Over 3 months – – – – – – – x x– – – – – –
Overnight1
0.16 0.17 0.13 0.14 0.15 0.19 0.18 0.19 0.250.17 0.18 0.18 0.11 0.10 0.21
Up to 1 year 0.33 0.30 0.28 0.33 0.30 0.33 0.70 0.65 0.690.40 0.39 0.39 0.49 0.42 0.62
Over 1 and up to 2 years – x x – x – – – –– – – – – –
Over 2 years – – x – – x – x –– – x x – x
Repos – – – – – – – – –– – – – – –

83
CORPORATIONS AND HOUSEHOLDS IN US DOLLARS (CONT.)
(%)
21.b
1
End-of-period.
2
2. Interest rates on deposits (outstanding amounts)
2016 2017
Overnight1
0.26 0.25 0.25 0.26 0.25 0.25 0.29 0.27 0.290.26 0.27 0.27 0.25 0.26 0.26
Up to 2 years 0.74 0.75 0.76 0.76 0.82 0.84 1.02 1.04 1.060.85 0.86 0.88 0.84 0.96 0.98
Over 2 years 3.21 3.17 3.19 3.14 3.11 3.12 3.12 3.13 3.143.12 3.11 3.15 3.15 3.05 3.08
Up to 3 months 0.14 0.14 0.14 0.14 0.14 0.14 0.14 0.15 0.160.14 0.14 0.15 0.15 0.14 0.14
Over 3 months – – – – – – – x x– – – – – –
Overnight1
0.16 0.17 0.13 0.14 0.15 0.19 0.18 0.19 0.250.17 0.18 0.18 0.11 0.10 0.21
Up to 2 years 0.77 0.80 0.80 0.80 0.79 0.79 0.82 0.84 0.900.79 0.71 0.71 0.82 0.79 0.86
Over 2 years 0.07 0.07 0.30 0.29 0.29 0.29 3.84 3.84 3.850.32 0.50 3.27 3.15 3.15 3.84
Repos – – – – – – – – –– – – – – –

84
1
End-of-period.
2
The annual percentage rate of charge (APRC) covers the total cost of a loan. The total cost comprises an interest rate component and a component of other (related) charges, such as the
cost of inquiries, administration, preparation of documents, guarantees, etc.
(%)
21.b
3. Interest rates on loans to households (new business)
2016 2017
Bank overdraft1
– – – – – – – – –– – – – – –
13.08 11.20 15.91 16.39 17.88 22.80 15.90 17.27 10.8321.86 21.01 21.87 16.12 20.11 18.82
26.76 28.13 29.09 25.56 26.11 25.49 26.14 25.65 26.2526.13 26.96 24.95 26.14 26.20 27.20
Lending for house purchase
Floating rate and up to 1 year 3.54 4.65 3.67 4.12 2.39 2.73 3.18 4.17 x2.80 3.12 4.30 3.73 3.87 2.67
guarantees 5.61 4.38 3.66 4.49 2.06 2.73 x 4.29 –4.27 4.19 4.34 3.95 x x
Over 1 and up to 5 years – – – – – – x x x– – x – – x
guarantees – – – – – – – – x– – x – – –
Over 5 and up to 10 years – – – – – – – – –– – – – – –
guarantees – – – – – – – – –– – – – – –
Over 10 years – – – – – – x x –x – – – – x
guarantees – – – – – – – – –– – – – – –
3.55 4.87 3.71 4.15 2.41 2.74 3.55 4.33 3.713.29 3.29 4.30 3.78 3.96 3.08
Consumer credit
Floating rate and up to 1 year x 12.01 x 9.89 16.21 x x x x17.29 x x x x x
guarantees x x x x – – – x –x – x – x –
Over 1 year – – – – – – – – –– – – – – –
guarantees – – – – – – – – –– – – – – –
x 12.01 x 9.89 16.28 x x x x17.35 x x x x x
Other lending by initial rate fixation
Floating rate and up to 1 year 3.26 3.90 x x x x x x xx x x x x x
Over 1 year – – – – – x – – –– – – – – x

85
(%)
21.b
1
End-of-period.
4. Interest rates on loans to non-financial corporations (new business)
2016 2017
Bank overdraft1
– – – – – – – – –– – – – – –
Revolving loans and overdraft¹ 4.35 4.46 4.35 4.23 4.25 4.28 4.12 4.07 4.204.44 4.14 4.20 4.07 4.03 4.11
Extended credit card credit¹ 24.54 25.23 22.28 22.41 22.56 24.94 24.74 20.02 20.406.59 24.86 6.67 24.97 24.94 25.03
Other loans up to 0.25 million euro by initial rate fixation
Floating rate and up to 1 year x x 6.09 x x x 9.90 x 4.12x x – x – –
guarantees x x x x – x 9.90 x 4.12x x – – – –
Over 1 year – x – x – – – x –– – x – – x
guarantees – – – – – – – – –– – – – – –
Other loans over 0.25 million euro and up to 1 million euro by initial rate fixation
Floating rate and up to 1 year – – – x – – x x x2.87 x – x – –
guarantees – – – x – – x x xx x – x – –
Over 1 year – – x – – – – x –– – – – – –
guarantees – – – – – – – x –– – – – – –
Other loans over 1 million euro by initial rate fixation
Floating rate and up to 1 year x 4.78 x x x – x – 4.63x x x 5.69 – 6.53
guarantees x 6.27 x x x – x – xx x x 5.69 – x
Over 1 year – – x – x – – – –– – – – – –
guarantees – – x – x – – – –– – – – – –

86
(%)
21.b
1
Including revolving loans, overdrafts, and extended and convenience credit card credit.
2
Including bank overdraft.
5. Interest rates on loans (outstanding amounts)
2016 2017
Loans to households
Lending for house purchase, with
maturity
Up to 1 year 2.49 2.55 2.55 2.50 2.50 2.70 3.24 3.28 2.892.72 2.65 2.85 2.90 3.28 3.28
Over 5 years 2.98 3.03 3.07 3.08 3.09 3.09 3.33 3.35 3.383.07 3.12 3.16 3.21 3.22 3.26
Consumer credit and other loans,
with maturity1
Up to 1 year2
10.26 9.83 11.06 8.91 8.80 8.64 12.76 13.45 13.229.04 10.08 10.28 11.86 11.64 12.75
Over 5 years 4.22 4.25 4.25 4.26 4.29 4.31 4.51 4.24 4.254.12 4.04 4.09 4.39 4.41 4.42
Loans to non-financial corporations
With maturity1
Up to 1 year2
4.75 4.86 4.37 4.17 4.32 4.30 4.36 4.36 4.404.49 4.48 4.30 4.17 4.12 4.29
Over 5 years 6.38 6.37 6.39 6.41 6.57 6.57 6.96 6.88 6.743.14 3.19 3.19 3.18 3.16 6.88
2016 2017
In euro
Loans up to an amount of
0.25 million euro 4.37 4.49 4.32 4.37 4.42 4.47 4.38 3.81 3.664.60 4.64 4.63 4.73 5.04 4.36
guarantees 4.36 4.62 4.60 4.57 4.50 4.47 4.07 4.04 3.925.11 4.75 4.87 4.73 5.11 4.77
Loans over an amount of
0.25 million euro and up to
1 million euro 3.34 3.84 3.85 3.15 3.42 3.50 3.66 3.27 3.423.44 4.18 4.30 3.65 3.70 3.91
guarantees 3.50 4.00 4.23 3.18 3.50 3.74 3.61 3.34 3.663.68 4.41 4.60 3.71 3.62 4.26
Loans over 1 million euro 3.14 2.84 2.23 2.18 2.14 2.57 2.76 2.47 2.182.45 2.02 2.49 2.58 2.26 3.33
guarantees 3.51 3.02 2.36 2.29 2.30 2.56 2.77 2.53 1.932.45 2.06 2.50 2.46 2.23 3.47
In US dollars
Loans up to an amount of
0.25 million euro x x x x x x x x xx x – x – –
guarantees – – x x – x x x xx x – – – –
Loans over an amount of
0.25 million euro and up to
1 million euro – – – – – – – – –x – – x – –
guarantees – – – – – – – – –x – – x – –
Loans over 1 million euro – x x x x – – – 4.63x x x 5.47 – x
guarantees – x x x x – – – xx x x 5.47 – x
CORPORATIONS (NEW BUSINESS)
(with floating interest rate, up to 1 year initial rate fixation and original maturity of over 1 year; %)
21.c

87
Loans to non-resident MFIs Total loans
Overnight Up to 1 month 1–3 months Over 3 months
2016
I 26 677.6 1 457.4 57.9 3.1 28 196.0 28 650.8
II 25 675.8 1 804.2 25.6 1.3 27 506.9 28 002.6
III 21 898.5 2 141.2 73.4 6.8 24 119.9 24 624.0
VI 20 331.4 1 300.4 96.4 8.3 21 736.5 22 093.3
V 16 514.7 1 855.1 18.4 5.8 18 394.0 18 774.9
VI 19 383.7 1 685.3 115.2 2.4 21 186.6 21 587.8
VII 19 031.6 1 318.5 29.1 5.0 20 384.2 20 803.8
VIII 21 275.9 1 580.2 115.2 35.6 23 006.9 23 509.6
IX 15 870.3 1 303.3 127.9 7.0 17 308.5 17 702.7
X 13 443.8 1 261.4 37.4 100.4 14 843.0 15 141.5
XI 14 486.6 1 493.5 101.1 4.1 16 085.3 16 273.6
XII 18 467.3 1 214.9 96.4 48.8 19 827.4 19 975.6
2017
I 14 598.3 602.8 104.7 17.1 15 322.9 15 832.3
II 13 879.0 497.9 94.6 – 14 471.5 15 050.1
III 16 590.4 893.1 81.3 3.0 17 567.8 17 823.0
LENDING IN THE INTERBANK MARKETS
(transactions; millions of euro)
Loans to resident MFIs
Overnight Up to
1 month
1–3 months Over
3 months
Overnight Up to
1 month
1–3 months Over
3 months
2016
I 0.0 16.7 0.6 – 17.3 373.6 63.9 – – 437.5 454.8
II – 16.5 – – 16.5 421.9 56.2 1.1 – 479.2 495.7
III – 16.5 – – 16.5 433.9 53.2 0.5 – 487.6 504.1
VI 2.3 16.5 0.5 – 19.3 302.2 35.3 – – 337.5 356.8
V 0.3 16.5 – – 16.8 326.7 37.4 – – 364.1 380.9
VI 0.1 16.5 – – 16.6 360.8 23.3 0.5 – 384.6 401.2
VII 0.0 16.5 0.5 – 17.0 356.7 45.9 – – 402.6 419.6
VIII 0.4 16.6 – – 17.0 385.9 99.8 – – 485.7 502.7
IX – 16.5 – – 16.5 283.7 93.5 0.5 – 377.7 394.2
X 0.1 – 0.5 – 0.6 226.6 67.8 3.5 – 297.9 298.5
XI 0.8 – 0.5 – 1.3 100.7 85.0 1.3 – 187.0 188.3
XII 0.8 2.5 – – 3.3 49.5 94.5 0.9 – 144.9 148.2
2017
I 0.1 2.4 0.7 0.6 3.8 426.9 78.1 0.6 – 505.6 509.4
II 0.5 1.3 – – 1.8 505.3 71.0 0.5 – 576.8 578.6
III 0.1 0.8 – – 0.9 200.5 52.9 0.9 – 254.3 255.2
22.

88
INTEREST RATES IN THE DOMESTIC INTERBANK MARKET
(% per annum)
2016 2017
Weighted average interest rates on loans in euro
Overnight 0.0 – – –0.3 –0.4 –0.4 –0.4 –0.4 –0.4–0.4 –0.4 – –0.4 –0.4 –0.4
Up to 1 month –0.3 –0.3 –0.4 –0.4 –0.4 –0.4 –0.4 –0.4 –0.4–0.4 –0.4 –0.4 – – –0.4
1–3 months 0.0 – – 0.0 – – –0.4 – –0.0 – – 0.0 –0.4 –
Over 3 months – – – – – – 0.0 – –– – – – – –
Weighted average interest rates on loans in foreign currencies
Overnight 0.2 0.2 0.2 0.3 0.2 0.2 0.5 0.5 0.40.3 0.3 0.3 0.3 0.3 1.2
Up to 1 month 1.1 1.8 1.4 0.4 0.4 0.4 0.5 0.5 0.80.4 0.3 0.4 0.4 0.4 0.5
1–3 months – 0.3 0.3 – – 0.3 0.5 0.5 0.6– – 0.0 0.3 0.04 0.3
Over 3 months – – – – – – – – –– – – – – –
PRINCIPAL FOREIGN EXCHANGE TRANSACTIONS (BY TYPE, COUNTERPARTY AND CURRENCY)1
(millions of euro)
2016 2017
Type of transaction
Spot exchange
transactions 10 047.9 12 699.8 10 140.7 9 689.0 6 796.8 7 893.8 6 846.7 8 880.1 7 918.86 866.6 7 485.5 9 636.4 8 576.0 6 873.3 7 876.0
Forward exchange
contracts 308.6 420.2 374.0 393.4 372.4 407.7 413.1 273.9 271.8262.1 261.5 395.0 415.0 364.2 252.5
Currency swap
arrangements 26 360.3 32 281.7 23 820.6 23 742.5 22 057.4 25 083.9 24 551.9 25 803.3 33 600.625 024.1 31 641.6 28 399.4 27 536.0 28 100.3 28 505.2
Counterparties
Resident MFIs 2 105.6 1 564.3 1 707.2 1 393.1 1 235.3 1 185.6 2 105.7 1 500.2 1 808.72 224.9 2 173.2 2 023.5 1807.8 850.8 1354.9
Resident other financial
intermediaries, financial
auxiliaries, insurance
corporations and pension
funds 61.6 60.8 131.2 75.7 93.7 215.3 304.9 270.6 305.996.0 74.0 198.0 106.5 150.2 349.6
Resident government,
non-financial corporations
and non-profit institutions
serving households 269.7 261.4 389.9 375.4 252.1 314.3 243.4 265.6 328.0222.8 265.2 301.7 261.6 306.3 307.4
Non-resident MFIs 24 574.8 31 978.4 22 892.9 22 975.8 21 890.5 25 150.0 19 705.7 20 724.0 26 767.323 779.5 30 315.5 28 266.1 24 866.0 25 798.3 25 291.7
Non-resident other
financial intermediaries,
financial auxiliaries,
insurance corporations
and pension funds 2 518.4 3 448.5 2 703.6 2 707.1 1 971.1 2 641.8 3 445.0 3 742.9 4 845.12 054.8 2 327.1 2 924.2 4 842.9 3 771.3 3 697.4
Non-resident government,
non-financial corporations
and non-profit institutions
serving households 6 379.5 7 377.3 5 776.8 5 568.3 3 451.6 3 524.2 4 952.4 8 104.9 7 326.93 389.7 3 683.7 3 658.0 3 453.3 3 415.2 4 925.5
Households 807.1 711.0 733.7 729.7 332.3 354.2 1 054.7 349.1 409.3385.1 549.9 1 059.4 1 188.8 1 045.8 707.2
Currencies
Total in all currencies 36 716.8 45 401.7 34 335.3 33 825.0 29 226.6 33 385.4 31 811.7 34 957.4 41 791.232 152.9 39 388.6 38 430.8 36 527.0 35 337.8 36 633.7
incl. USD for EUR 21 844.9 26 616.2 15 579.8 16 595.4 16 837.6 17 393.3 15 931.0 18 469.0 21 154.216 488.1 22 057.7 20 450.9 19 480.1 19 779.1 20 954.8
incl. GBP for EUR 1 656.0 1 798.4 1 824.7 2 130.0 1 918.8 1 390.8 897.4 1 147.1 1 301.72 093.5 2 250.0 2 048.4 1 805.3 1 106.2 983.9
incl. other currencies for
EUR 1 361.9 1 402.3 1 509.0 1 812.5 1 674.7 3 256.4 2 338.2 1 455.7 2 845.44 145.7 2 371.0 2 851.6 2 159.9 3 523.4 2 976.0
1
Including the cash and non-cash transactions performed by credit institutions. The volume of cash and non-cash transactions has been translated into euro applying the exchange rate of
the respective foreign currency as set by Latvijas Banka on the last day of the reporting month.
23.
24.

89
NON-CASH FOREIGN EXCHANGE TRANSACTIONS1
(millions of euro)
2016 2017
USD for EUR2
Amount 21 835.7 26 607.0 15 572.2 16 587.9 16 829.3 17 384.6 15 922.1 18 461.3 21 146.316 476.2 22 046.4 20 442.0 19 469.0 19 766.8 20 942.5
%4
59.5 58.5 45.4 49.0 57.6 52.1 50.0 52.8 50.651.3 56.0 53.2 53.3 55.9 57.1
GBP for EUR2
Amount 1 646.2 1 795.4 1 820.7 2 126.0 1 913.7 1 385.1 893.2 1 139.1 1 294.12 088.1 2 243.0 2 042.5 1 799.4 1 096.7 977.9
%4
4.5 4.0 5.3 6.3 6.5 4.2 2.8 3.3 3.16.5 5.7 5.3 4.9 3.1 2.7
Other currencies (except
USD and GBP) for EUR2
Amount 1 358.4 1 401.9 1 502.9 1 809.1 1 670.5 3 254.0 2 335.3 1 451.9 2 841.94 142.5 2 366.5 2 845.6 2 156.1 3 519.3 2 969.6
%4
3.7 3.1 4.4 5.3 5.7 9.7 7.3 4.2 6.812.9 6.0 7.4 5.9 10.0 8.1
RUB for USD3
Amount 5 075.4 6 570.1 7 668.3 6 148.0 3 556.6 4 905.9 5 490.6 5 673.3 6 202.43 638.2 4 232.3 3 703.4 4 014.3 3 337.7 5 422.4
%4
13.8 14.5 22.3 18.2 12.2 14.7 17.2 16.2 14.811.3 10.8 9.6 11.0 9.4 14.8
GBP for USD3
Amount 2 096.7 2 705.1 2 374.7 2 284.4 2 194.3 2 686.2 2 246.3 2 925.5 1 703.91 711.0 2 916.3 3 212.1 2 825.7 1 596.6 1 099.7
%4
5.7 6.0 6.9 6.8 7.5 8.0 7.1 8.4 4.15.3 7.4 8.4 7.7 4.5 3.0
SEK for USD3
Amount 58.7 59.9 233.7 263.1 135.6 136.8 35.1 106.1 89.282.3 193.6 112.3 151.2 102.1 28.3
%4
0.2 0.1 0.7 0.8 0.5 0.4 0.1 0.3 0.20.2 0.5 0.3 0.4 0.3 0.1
EUR, RUB, GBP and
SEK) for USD3
Amount 3 359.7 4 605.3 4 214.8 3 358.9 2 387.4 3 231.1 4 363.8 4 757.0 8 191.13 656.0 4 584.4 4 861.3 5 174.4 5 445.2 4 745.3
%4
9.1 10.1 12.3 9.9 8.2 9.7 13.7 13.6 19.611.4 11.6 12.6 14.2 15.4 12.9
EUR and USD) for other
currencies3
Amount 1 288.9 1 685.5 938.2 1 243.4 530.6 398.9 555.0 426.1 323.6345.5 796.6 1 216.1 937.0 493.8 463.0
%4
3.5 3.7 2.7 3.7 1.8 1.2 1.8 1.2 0.81.1 2.0 3.2 2.6 1.4 1.3
¹ Including non-cash transactions performed by credit institutions, reported by major currency.
2
The transaction volume has been translated into euro using the weighted average exchange rate of the respective foreign currency for the reporting month.
3
The volume of non-cash transactions has been translated into euro applying the accounting exchange rate of the respective foreign currency on the last day of the reporting month
(where the currency is not quoted by the ECB, exchange rates are determined using Thomson Reuters end-of-month closing price).
4
As per cent of the total.
25.
EURO FOREIGN EXCHANGE REFERENCE RATES PUBLISHED BY THE ECB
(end-of-period; foreign currency vs 1 EUR)
2016 2017
31.01. 29.02. 31.03. 30.04. 31.05. 30.06. 31.07. 31.08. 30.09. 31.10. 30.11. 31.12. 31.01. 28.02. 31.03.
USD 1.0920 1.0888 1.1385 1.1403 1.1154 1.1102 1.1113 1.1132 1.1161 1.0946 1.0635 1.0541 1.0755 1.0597 1.0691
GBP 0.7641 0.7858 0.7916 0.7803 0.7619 0.8265 0.8440 0.8481 0.8610 0.9005 0.8525 0.8562 0.8611 0.8531 0.8555
JPY 132.2500 123.1400 127.9000 122.3400 123.8300 114.0500 114.8300 115.0100 113.0900 114.9700 120.4800 123.4000 121.9400 118.8300 119.5500
CHF 1.1144 1.0914 1.0931 1.0984 1.1044 1.0867 1.0823 1.0957 1.0876 1.0820 1.0803 1.0739 1.0668 1.0648 1.0696
26.

90
WEIGHTED AVERAGE EXCHANGE RATES (CASH TRANSACTIONS)1
(foreign currency vs EUR)
2016 2017
USD
Buy 1.0971 1.1184 1.1219 1.1462 1.1412 1.1339 1.0721 1.0745 1.07911.1190 1.1320 1.1337 1.1125 1.0856 1.0634
Sell 1.0788 1.1060 1.1055 1.1291 1.1286 1.1189 1.0581 1.0601 1.06251.1048 1.1156 1.1165 1.0988 1.0768 1.0500
GBP
Buy 0.7628 0.7847 0.7916 0.8032 0.7849 0.7981 0.8689 0.8578 0.87200.8522 0.8658 0.8614 0.9030 0.8748 0.8524
Sell 0.7474 0.7688 0.7737 0.7861 0.7716 0.7862 0.8519 0.8442 0.85650.8325 0.8475 0.8432 0.8824 0.8604 0.8364
JPY
Buy 131.2660 129.7883 130.5036 127.8933 124.8119 121.8024 124.5833 124.0133 122.6867120.6191 117.2687 121.6475 118.5544 121.3693 125.7813
Sell 127.4484 124.0418 123.6487 122.6107 120.4512 116.6677 118.8126 117.0006 117.4587113.5047 110.7532 112.1614 111.0345 113.2427 117.6622
SEK
Buy 9.5399 9.5429 9.4044 9.3077 9.4205 9.4291 9.5905 9.6076 9.68439.5733 9.6022 9.6486 9.8401 10.0011 9.8163
Sell 9.1902 9.3096 9.1981 9.1043 9.1562 9.2093 9.3959 9.3825 9.42549.3290 9.3573 9.4361 9.5542 9.7286 9.6179
RUB
Buy 83.5001 84.8913 78.3678 76.0321 75.1493 73.8345 64.2010 62.7322 62.199771.7452 73.4237 72.5679 70.1605 70.2186 66.1728
Sell 81.2215 83.0537 76.1175 73.7142 72.7639 71.5338 62.4312 61.1011 60.720069.6913 71.1134 70.8448 68.2576 68.5606 64.4040
CHF
Buy 1.1368 1.1169 1.1078 1.1100 1.1239 1.1049 1.0877 1.0831 1.08831.1081 1.1055 1.1022 1.1042 1.0952 1.0900
Sell 1.0843 1.0947 1.0788 1.0795 1.0926 1.0791 1.0628 1.0537 1.07601.0763 1.0924 1.0938 1.0897 1.0742 1.0780
1
Including the weighted average exchange rates of cash transactions performed by credit institutions and currency exchange bureaus.
27.

91
STRUCTURE OF GOVERNMENT SECURITIES
2016 2017
Stock of government
securities outstanding 988.6 1 019.1 1 119.1 1 149.1 1 169.1 1 199.1 1 048.1 1 048.1 1 078.1928.2 958.2 1 000.7 1 030.8 1 030.8 1 060.8
Residents 928.7 963.5 1 057.3 1 082.0 1 094.9 1 122.7 952.7 952.4 980.5852.4 876.1 905.2 946.8 946.7 972.0
Non-financial
corporations 28.4 28.4 28.4 28.4 28.4 28.4 17.1 16.8 16.820.6 20.6 20.6 20.6 20.6 20.6
Central bank 76.1 87.5 99.0 115.6 130.5 138.8 149.1 150.4 160.7138.8 139.3 141.3 144.3 145.6 149.1
Credit institutions 377.0 409.9 460.8 475.7 474.1 485.5 433.0 436.3 453.9320.1 343.3 352.6 393.3 392.3 424.0
Money market funds 0 0 0 0 0 0 0 0 00 0 0 0 0 0
Other financial
intermediaries excluding
investment funds 0.3 0.3 9.4 0.3 0.3 0.3 0.3 0.3 0.30.3 0.3 0.3 0.3 0.3 0.3
Financial auxiliaries 27.5 28.0 48.0 48.0 48.0 48.0 17.3 18.5 17.811.0 11.0 17.3 17.3 17.3 17.3
and pension funds 354.2 344.1 346.6 348.9 347.5 355.7 297.4 292.5 293.4320.5 320.5 331.9 329.8 329.8 320.0
Insurance
corporations 40.3 40.3 42.0 44.8 44.9 48.0 37.5 37.2 37.240.5 40.5 40.6 40.6 40.6 40.6
Pension funds 313.9 303.8 304.6 304.1 302.6 307.7 259.9 255.3 256.2280.0 280.0 291.3 289.2 289.2 279.4
Central government 55.0 55.0 55.4 55.4 56.4 56.4 32.1 32.1 32.132.1 32.1 32.1 32.1 32.1 32.1
Households 3.5 3.5 2.9 2.9 2.9 2.9 1.7 1.7 1.72.4 2.4 2.4 2.4 2.0 2.0
Non-profit institutions
serving households 6.7 6.7 6.7 6.7 6.7 6.7 4.8 3.9 3.96.7 6.7 6.7 6.7 6.7 6.7
Non-residents 59.9 55.6 61.8 67.1 74.2 76.3 95.3 95.6 97.575.8 82.1 95.5 84.0 84.1 88.8
Non-financial
corporations 0 0 0 0 0 0 0 0 00 0 0 0 0 0
Credit institutions 41.8 35.3 35.3 42.5 43.4 47.6 63.5 63.5 63.448.7 49.0 51.0 51.2 51.6 51.4
Money market funds 0 0 0 0 0 0 0 0 00 0 0 0 0 0
MFIs excluding central
banks, credit institutions
and money market funds 0 0 0 0 0 0 0 0 00 0 0 0 0 0
Other financial
intermediaries excluding
investment funds 0 0 0 0 0 0 0 0 00 0 0 0 0 0
Financial auxiliaries 18.0 20.2 26.4 24.4 30.7 28.6 31.8 32.1 34.127.1 33.1 44.5 32.8 32.5 37.3
and pension funds 0 0 0 0 0 0 0 0 00 0 0 0 0 0
Central government 0 0 0 0 0 0 0 0 00 0 0 0 0 0
Households 0.1 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.00.0 0.0 0.0 0.0 0.0 0.0
Non-profit institutions
serving households 0 0 0 0 0 0 0 0 00 0 0 0 0 0
28.

92
AUCTIONS OF GOVERNMENT SECURITIES IN THE PRIMARY MARKET
(Q4 2016 and Q1 2017)
Date (dd.mm.) Initial maturity (months) Supply (thousands of euro) Demand (thousands of euro) Purchase (thousands of euro) Weighted average discount rate
(%)
Competitive multi-price auctions
12.10. 36 24 000 98 500 24 000 –0.055
07.12. 36 24 000 144 950 24 000 –0.018
25.01. 36 24 000 99 300 24 000 –0.025
08.03. 60 24 000 96 098 14 178 0.240
Primary placement of government securities via outright sales of securities
12.10. 36 – 53 201 6 000 –0.055
07.12. 36 – 24 535 6 000 –0.018
25.01. 36 – 30 002 6 000 –0.025
08.03. 60 – 16 800 15 822 0.240
29.
DYNAMICS OF GDP
20161
2017
Q1 Q2 Q3 Q4 Q1
At current prices (millions of euro) 25 021.3 5 507.0 6 309.1 6 467.6 6 737.6 5 871.1
At constant prices2
(millions of euro) 21 780.8 4 826.7 5 454.5 5 620.0 5 879.6 5 018.2
Annual growth rate (%) 2.0 2.4 2.3 0.5 2.6 4.0
Gross value added (%) 1.4 2.0 1.5 0.0 2.0 4.3
1
2
Chain-linked; average prices in 2010. Data seasonally non-adjusted.
30.
CHANGES IN THE AVERAGE MONTHLY WAGES AND SALARIES AND UNEMPLOYMENT
2016 2017
Average gross wages and salaries1
EUR per month 814 811 855 842 854 862 866 866 850 852 876 954 878 861 920
Year-on-year changes (%) 104.6 105.9 105.2 103.4 106.5 105.5 100.3 106.4 104.8 104.3 107.4 106.1 107.8 106.2 107.5
Real net wage index1
(year-on-
year basis; %) 104.9 106.3 105.6 103.8 107.0 105.5 99.8 106.0 103.8 102.9 105.6 103.5 104.0 102.0 103.4
Number of registered unemployed persons
At end of month 85 452 86 581 85 414 82 268 79 092 78 164 77 425 75 664 74 357 74 053 75 348 78 357 80 016 79 152 76 431
Year-on-year changes (%) 99.1 98.5 98.6 99.3 98.2 96.9 96.0 94.8 94.7 94.9 95.2 95.8 93.6 91.4 89.5
1
31.

93
LATVIAN FOREIGN TRADE BALANCE
(millions of euro; exports – in FOB prices, imports – in CIF prices)
20161
2017
Q1 Q2 Q3 Q4 Q1
Exports 10 354.2 2 362.6 2 516.5 2 648.1 2 826.9 2 601.8
Imports 12 327.2 2 788.3 3 048.8 3 117.2 3 372.9 3 158.4
Balance –1 973.1 –425.7 –532.3 –469.1 –546.0 –556.7
20161
2017
Exports 723.2 791.5 847.9 850.2 852.3 814.0 808.7 832.8 960.2801.5 882.8 963.8 977.0 958.8 891.1
Imports 829.3 926.0 1 033.0 1 026.0 1 029.5 993.4 984.1 984.6 1 189.7985.7 1 072.4 1 059.1 1 120.1 1 118.4 1 134.4
Balance –106.1 –134.5 –185.1 –175.8 –177.2 –179.3 –175.3 –151.8 –229.5–184.1 –189.6 –95.3 –143.1 –159.6 –243.3
1
32.
MAIN EXPORT GOODS OF LATVIA
(in FOB prices)
20161
2017
Q1 Q2 Q3 Q4 Q1
Millions
of euro
% Millions
of euro
% Millions
of euro
% Millions
of euro
% Millions
of euro
% Millions
of euro
%
Total 10 354.2 100.0 2 362.6 100.0 2 516.5 100.0 2 648.1 100.0 2 826.9 100.0 2 601.8 100.0
Agricultural and food products 2 007.5 19.4 428.1 18.1 404.9 16.1 544.1 20.6 630.3 22.3 487.5 18.7
Mineral products 512.6 5.0 109.6 4.6 141.3 5.6 127.5 4.8 134.2 4.8 128.9 5.0
Products of the chemical and allied
industries 804.8 7.8 191.5 8.1 206.0 8.2 194.1 7.3 213.2 7.5 214.3 8.2
Plastics and articles thereof; rubber
and articles thereof 346.2 3.3 72.9 3.1 83.5 3.3 92.4 3.5 97.3 3.4 80.7 3.1
Wood and articles of wood 1 776.1 17.2 442.4 18.7 464.0 18.4 419.9 15.9 449.8 15.9 485.4 18.7
Pulp of wood; paper and paperboard 232.6 2.2 55.6 2.4 53.7 2.1 59.0 2.2 64.3 2.3 63.3 2.4
Textiles and textile articles 315.2 3.0 76.8 3.2 74.0 2.9 84.9 3.2 79.4 2.8 89.6 3.5
Articles of stone, plaster, cement,
glassware and ceramic products 302.7 2.9 67.5 2.9 77.2 3.1 82.5 3.1 75.6 2.7 76.5 2.9
Base metals and articles of base
metals 838.1 8.1 192.5 8.1 230.4 9.2 208.9 7.9 206.4 7.3 216.8 8.3
Machinery and mechanical
appliances; electrical equipment 1 842.7 17.8 431.6 18.3 456.6 18.1 456.6 17.2 498.0 17.6 441.5 17.0
Transport vehicles 657.3 6.4 136.1 5.8 163.0 6.5 188.0 7.1 170.3 6.0 160.9 6.2
Miscellaneous manufactured articles 362.8 3.5 81.7 3.5 90.1 3.6 95.0 3.6 96.0 3.4 88.3 3.4
Other goods 355.5 3.4 76.4 3.2 71.9 2.9 95.1 3.6 112.0 4.0 68.1 2.6
1
33.

94
MAIN IMPORT GOODS OF LATVIA
(in CIF prices)
201720161
Q1 Q2 Q3 Q4 Q1
Millions
of euro
% Millions
of euro
% Millions
of euro
% Millions
of euro
% Millions
of euro
% Millions
of euro
%
Total 12 327.2 100.0 2 788.3 100.0 3 048.8 100.0 3 117.2 100.0 3 372.9 100.0 3 158.4 100.0
Agricultural and food products 2 049.5 16.6 463.0 16.6 481.2 15.8 531.7 17.1 573.7 17.0 535.4 17.0
Mineral products 1 108.5 9.0 263.5 9.4 255.3 8.4 268.1 8.6 321.6 9.5 317.0 10.0
Products of the chemical and allied
industries 1 305.3 10.6 333.9 12.0 335.9 11.0 309.5 9.9 326.0 9.7 388.4 12.3
Plastics and articles thereof; rubber
and articles thereof 696.7 5.7 155.3 5.6 177.0 5.8 190.5 6.1 173.9 5.1 181.3 5.7
Wood and articles of wood 409.2 3.3 96.1 3.4 106.0 3.5 102.7 3.3 104.5 3.1 106.5 3.4
Pulp of wood; paper and paperboard 283.8 2.3 66.5 2.4 69.9 2.3 73.5 2.4 73.9 2.2 72.9 2.3
Textiles and textile articles 482.8 3.9 113.0 4.1 112.1 3.7 138.8 4.5 118.9 3.5 123.7 3.9
Articles of stone, plaster, cement,
glassware and ceramic products 240.4 1.9 47.7 1.7 65.9 2.2 70.2 2.3 56.5 1.7 56.3 1.8
Base metals and articles of base
metals 941.5 7.6 201.8 7.2 237.6 7.8 244.8 7.8 257.4 7.6 238.8 7.6
Machinery and mechanical
appliances; electrical equipment 2 644.4 21.5 590.3 21.2 660.1 21.6 646.2 20.7 747.9 22.2 584.1 18.5
Transport vehicles 1 232.2 10.0 260.1 9.3 345.5 11.3 306.2 9.8 320.4 9.5 260.3 8.2
Miscellaneous manufactured articles 305.7 2.5 65.8 2.4 70.7 2.3 76.1 2.4 93.2 2.8 68.1 2.2
Other goods 627.1 5.1 131.4 4.7 131.5 4.3 159.0 5.1 205.1 6.1 225.7 7.1
1
34.

95
LATVIAN FOREIGN TRADE PARTNERS
(exports – in FOB prices, imports – in CIF prices)
2016 2017
Millions of euro % of the total Millions of euro % of the total
Exports Imports Balance Exports Imports Exports Imports Balance Exports Imports
Total 10 354.2 12 327.2 –1 973.1 100.0 100.0 2 601.8 3 158.4 –556.7 100.0 100.0
Euro area countries 5 157.0 7 137.0 –1 980.0 49.8 57.9 1 293.1 1 774.4 –481.2 49.7 56.2
EU28 countries 7 651.9 9 841.9 –2 190.1 73.9 79.8 1 943.4 2 402.3 –459.0 74.7 76.1
incl. Germany 741.8 1 471.3 –729.5 7.2 11.9 204.8 339.6 –134.8 7.9 10.8
Sweden 625.9 440.3 185.5 6.0 3.6 170.7 91.5 79.2 6.6 2.9
UK 578.7 239.4 339.3 5.6 1.9 135.8 54.1 81.7 5.2 1.7
Finland 204.4 557.2 –352.8 2.0 4.5 56.3 134.9 –78.6 2.2 4.3
Denmark 481.8 269.5 212.3 4.7 2.2 148.7 81.4 67.3 5.7 2.6
Netherlands 295.8 507.2 –211.3 2.9 4.1 74.3 123.2 –49.0 2.9 3.9
Lithuania 1 891.7 2 167.7 –276.0 18.3 17.6 445.8 560.8 –115.0 17.1 17.8
Estonia 1 257.6 976.0 281.6 12.1 7.9 310.5 247.4 63.1 11.9 7.8
Poland 540.3 1 326.7 –786.5 5.2 10.8 129.7 301.2 –171.5 5.0 9.5
CIS 1 173.9 1 277.4 –103.5 11.3 10.4 293.7 346.0 –52.3 11.3 10.9
incl. Russia 788.4 948.9 –160.5 7.6 7.7 204.4 260.4 –56.0 7.9 8.2
Other countries 1 528.3 1 207.9 320.4 14.8 9.8 364.7 410.1 –45.4 14.0 13.0
incl. USA 152.8 101.4 51.3 1.5 0.8 55.7 22.1 33.6 2.1 0.7
Norway 238.0 43.6 194.4 2.3 0.4 64.9 12.1 52.8 2.5 0.4
China 118.8 401.4 –282.7 1.1 3.3 33.7 112.5 –78.8 1.3 3.6
35.
CONVENIENCE AND EXTENDED CREDIT, REVOLVING LOANS AND OVERDRAFT TO RESIDENT NON-FINANCIAL
CORPORATIONS AND HOUSEHOLDS
Non-financial corporations Households
Revolving loans and
overdraft
Convenience credit Extended credit Revolving loans and
overdraft
Convenience credit Extended credit
2016
I 708.5 1.6 1.2 47.0 6.8 115.7
II 713.3 1.6 1.2 45.4 6.8 114.6
III 710.4 1.7 1.3 43.4 6.6 116.5
IV 723.8 1.8 1.5 42.7 6.6 115.9
V 723.2 1.8 1.9 42.7 6.7 117.7
VI 718.1 1.6 2.1 42.1 6.6 117.1
VII 691.1 1.6 2.5 41.4 6.3 117.1
VIII 722.0 1.6 2.8 42.3 6.2 119.1
IX 683.0 1.7 3.2 42.7 7.1 118.6
X 669.7 1.7 3.6 42.3 7.4 118.7
XI 692.1 1.7 3.9 42.7 7.3 119.2
XII 655.2 1.7 4.1 38.1 6.3 117.6
2017
I 702.4 1.6 4.6 37.0 6.2 118.9
II 682.9 1.5 5.0 35.8 6.5 116.7
III 714.9 1.6 5.8 35.8 6.6 118.1
36.

96
LOANS TO RESIDENT NON-FINANCIAL CORPORATIONS IN THE BREAKDOWN BY RESIDUAL MATURITY AND BY
INTEREST RATE RESET PERIOD
In euro
With original maturity of over 1 year With original maturity of over 2 years
with a residual maturity
of up to 1 year
with a residual maturity of
over 1 year and interest
rate reset period ≤1 year
of up to 2 years
over 2 years and interest
rate reset period ≤2 years
2016
III 4 759.1 883.5 3 681.1 4 575.5 1 415.8 2 996.4
VI 4 920.8 731.0 4 037.4 4 757.2 1 391.6 3 240.1
IX 5 023.8 686.0 4 075.3 4 873.6 1 274.0 3 367.5
XII 5 111.2 608.6 4 201.3 4 971.1 1 269.1 3 453.0
2017
III 5 083.7 569.2 4 255.3 4 939.9 1 305.9 3 422.8
37.a
LOANS TO RESIDENT HOUSEHOLDS IN THE BREAKDOWN BY RESIDUAL MATURITY AND BY INTEREST RATE RESET
PERIOD
In euro
With original maturity of over 1 year With original maturity of over 2 years
of up to 1 year
over 1 year and interest
rate reset period ≤1 year
of up to 2 years
over 2 years and interest
rate reset period ≤2 years
2016
III 4 902.3 234.7 4 119.0 4 862.7 355.6 4 198.7
VI 4 903.9 226.5 4 190.2 4 859.0 341.5 4 240.2
IX 4 897.5 220.6 4 194.6 4 849.3 334.3 4 233.7
XII 4 915.1 212.2 4 202.5 4 867.3 321.3 4 224.2
2017
III 4 886.5 168.5 4 156.3 4 843.7 280.8 4 153.0
37.b

97
VOLUMES OF NEW BUSINESS AND RENEGOTIATED LOANS1
IN EURO IN MFI TRANSACTIONS WITH RESIDENT
NON-FINANCIAL CORPORATIONS AND HOUSEHOLDS
(millions of euro)
Loans to households other than revolving loans and overdrafts, convenience and extended credit card debt Loans to non-financial corporations other
than revolving loans and overdrafts,
convenience and extended credit card debtFor house purchase For consumption For other purpose
of which
renegotiated loans
of which
renegotiated loans
of which
renegotiated loans
of which
renegotiated loans
2016
I 50.1 18.7 15.4 0.8 9.8 6.1 287.7 190.5
II 51.9 22.1 17.6 1.0 13.5 8.4 264.1 150.6
III 66.3 22.0 19.5 0.8 8.7 3.7 472.7 355.9
IV 70.0 30.8 20.8 0.7 11.3 4.8 436.4 280.0
V 68.2 28.2 22.3 1.0 15.2 12.2 626.2 430.4
VI 72.6 29.3 20.9 0.7 11.1 7.2 311.1 203.1
VII 69.1 27.9 19.3 0.6 7.2 2.2 386.9 245.1
VIII 74.7 29.4 20.0 0.8 9.7 4.5 456.3 334.7
IX 75.3 30.6 19.0 1.4 7.4 3.7 379.7 230.0
X 85.5 31.1 20.0 1.0 16.7 3.8 444.8 260.9
XI 76.5 33.1 19.5 0.9 12.7 6.8 394.8 293.0
XII 81.6 39.2 20.3 0.9 27.3 5.4 441.1 306.8
2017
I 69.1 33.3 20.9 0.8 5.1 2.5 233.9 161.3
II 72.0 35.1 20.1 1.3 5.6 4.0 471.5 326.2
III 83.1 36.3 23.7 1.0 22.2 18.3 521.5 398.0
38.
1
Loans whose contracts have been renegotiated following the active involvement of the household or non-financial corporation in adjusting the terms and conditions of an existing
contract, including the interest rate.

98
LATVIA'S BALANCE OF PAYMENTS
2016 2017
Q1 Q2 Q3 Q4 Q1
Analytical data (% of GDP)1
Current account 1.5 2.8 –0.6 1.4 2.4 2.7
External debt
Gross 147.3 148.2 153.1 148.9 147.3 146.7
Net 28.6 29.7 29.8 29.2 28.6 27.4
Foreign direct investment in Latvia
Transactions 0.5 –2.0 –2.7 3.6 2.4 2.4
Closing position 54.0 55.1 53.6 54.0 54.0 54.4
Transactions (millions of EUR)
Current account 369.5 152.5 –37.2 93.4 160.9 158.5
Goods –1 741.6 –443.1 –474.1 –390.1 –434.4 –542.5
Credit (export) 10 266.2 2 326.2 2 482.5 2 648.1 2 809.4 2 603.6
Debit (import) 12 007.8 2 769.3 2 956.6 3 038.2 3 243.7 3 146.1
Services 1 878.4 439.8 436.2 485.9 516.6 513.5
Credit (export) 4 243.7 969.2 1 024.2 1 105.7 1 144.6 1 063.6
Debit (import) 2 365.2 529.3 588.0 619.9 628.1 550.1
Primary income 58.0 124.5 –68.6 –24.8 26.9 139.1
Credit 1 483.8 433.9 382.0 304.6 363.3 511.9
Debit 1 425.8 309.4 450.6 329.4 336.4 372.9
Secondary income 174.7 31.2 69.3 22.5 51.8 48.4
Credit 899.4 215.2 228.1 187.2 268.8 210.2
Debit 724.6 184.1 158.9 164.7 217.0 161.8
Capital account 249.7 107.4 62.8 –2.5 81.9 –1.9
Credit 262.2 108.7 63.5 6.6 83.5 0.0
Debit 12.5 1.3 0.7 9.1 1.5 2.0
Financial account 534.7 183.7 104.7 50.6 195.8 245.8
Direct investment 47.3 107.9 236.7 –163.1 –134.2 –32.8
Foreign 161.4 –2.5 68.1 70.2 25.7 110.0
Latvia 114.1 –110.5 –168.6 233.3 159.9 142.7
Portfolio investment 939.5 1 168.8 –352.0 241.0 –118.4 342.2
Assets 1 898.1 1 117.4 210.7 228.6 341.4 136.2
Liabilities 958.6 –51.4 562.7 –12.5 459.8 –206.0
Financial derivatives 196.2 0.3 0.9 12.9 182.1 –198.5
Assets –275.8 –94.0 –105.1 –50.6 –26.1 –276.2
Liabilities –471.9 –94.3 –105.9 –63.5 –208.2 –77.7
Other investment –772.6 –1 099.5 222.1 363.7 –258.9 88.7
Assets 85.6 901.2 744.2 –589.7 –970.1 552.0
Liabilities 858.2 2 000.7 522.1 –953.4 –711.3 463.3
Reserve assets 124.4 6.2 –3.0 –403.9 525.1 46.2
39.
1

Additional Information
General notes
The cut-off date for the information used in the publication Macroeconomic Developments
Report (June 2017, No. 25) is 2 June 2017.
The Macroeconomic Developments Report (June 2017, No. 25) published by Latvijas Banka
is based on data provided by the CSB, ECB, Treasury, Nasdaq Riga, Euribor-EBF and
Latvijas Banka.
Data sources for charts are the Bloomberg (Charts 1, 1.1, 3, 4 and 29 ), Latvijas Banka
(Charts 1.1, 2.1, 2.2, 6–14, 24, 26–29, 32 and 33), ECB (Charts 1.1 and 10), Reuters
(Charts 2 and 29), the Treasury (Charts 5 and 23), the CSB (Charts 15–22, 24, 26, 28, 32 and
33), the EC (Charts 20, 25, 27, 28 and 30), SEA (Chart 26) and FAO (Chart 31).
Data sources for Statistics tables are Latvijas Banka (Tables 1, 3, 4, 6–25, 27, 28, 36–39),
Nasdaq Riga (Table 1), the Treasury (Tables 1, 2.ab and 29), Euribor-EBF (Table 1), the
CSB (Tables 2.ab and 30–35) and ECB (Tables 5 and 26).
Details may not add because of rounding-off.
FOB value is the price of a commodity on the border of the exporting country, including the
transportation and insurance costs only up to the border.
CIF value is the price of a commodity on the border of the importing country, including the
transportation and insurance costs only up to the border.
"–" – no transactions in the period; "x" – no data available, no computation of indicators
possible or insufficient number of respondents to publish information.
Money and banking sector
Calculation of monetary aggregates includes the balance sheet data of Latvijas Banka and
information from the financial position reports of other MFIs, prepared using methodology
of Latvijas Banka (see Latvijas Banka Regulation No. 132 "Regulation for Compiling the
'Monthly Financial Position Report' of Monetary Financial Institutions" of 16 May 2014).
In the publication, the following terms have been used:
MFIs – financial institutions forming the money-issuing sector. In Latvia, MFIs include
Latvijas Banka, credit institutions and other MFIs in compliance with the List of Monetary
Financial Institutions of the Republic of Latvia compiled by Latvijas Banka. In the EU,
MFIs include the ECB, the national central banks of the euro area, credit institutions and
other MFIs (money market funds) in compliance with the original List of MFIs published by
the ECB.
Non-MFIs – entities other than MFIs.
Financial institutions – other financial intermediaries, excluding insurance corporations and
pension funds, (hereinafter, OFIs), financial auxiliaries, insurance corporations and pension
funds.
OFIs – financial corporations that are primarily engaged in financial intermediation by
incurring liabilities in forms other than currency, deposits and close substitutes for deposits
from their customers other than MFIs, or insurance technical reserves. OFIs are corporations
engaged in lending (e.g. financial leasing companies, factoring companies, export/import
financing companies), investment funds, investment brokerage companies, financial vehicle
corporations, financial holding corporations, and venture capital corporations. OFIs data
include also financial auxiliaries' data.
99
ADDITIONAL INFORMATIONMACROECONOMIC DEVELOPMENTS REPORT
June 2017

Financial auxiliaries – financial corporations that are primarily engaged in auxiliary financial
activities, i.e. activities that are closely related to financial intermediation but are not
financial intermediation themselves, e.g. investment brokers who do not engage in financial
intermediation services on their own behalf, corporations that provide infrastructure for
financial markets, central supervisory institutions of financial institutions and the financial
market provided that they are separate institutional units. In Latvia, the FCMC and the
Nasdaq Riga shall also be regarded as financial auxiliaries. Financial auxiliaries' data are
included in OFIs data.
Non-financial corporations – economic entities producing goods or providing non-financial
services with the aim of gaining profit or other yield.
Households – natural persons or groups of natural persons whose principal activity is
consumption and who produce goods and services exclusively for their own consumption,
as well as non-profit institutions serving households. The following are also regarded as
households in the Republic of Latvia: persons engaged in individual entrepreneurship
provided that they have not registered their activity with the Commercial Register of the
Enterprise Register of the Republic of Latvia.
Holdings of securities other than shares – financial assets, which are instruments of the
holder, usually negotiable and traded or compensated on secondary markets and which do
not grant the holder any ownership rights over the issuing institutional unit.
The following information is published in accordance with the ECB methodology:
1) Assets and liabilities of Latvijas Banka (Table 6), expanding the range of reported
financial instruments;
2) Aggregated balance sheet of MFIs (excluding Latvijas Banka), i.e. the sum of the
harmonised balance sheets of Latvia's MFIs, excluding Latvijas Banka (Table 7);
3) monetary aggregates and their components (Table 4) reflect Latvia's contributions to
the euro area monetary aggregates and their counterparts. These are obtained from the
consolidated balance sheet of MFIs. Latvia's contributions to the following monetary
aggregates are calculated and published:
– overnight deposits in all currencies held with MFIs;
– deposits redeemable at a period of notice of up to and including 3 months (i.e. short-term
savings deposits) made in all currencies and deposits with an agreed maturity of up to and
including 2 years (i.e. short-term time deposits) in all currencies held with MFIs.
– repurchase agreements, debt securities with a maturity of up to and including 2 years
issued by MFIs, and money market fund shares and units.
The monetary aggregates of Latvijas Banka (Table 3) are also published comprising the
national contribution to the euro area monetary base and the counterparts, as well as a
monetary survey of Latvia's MFIs (excluding Latvijas Banka; Table 10).
In view of the fact that Latvijas Banka collects more comprehensive information, the
following is also published:
1) consolidated balance sheet of MFIs obtained by netting out inter-MFI positions in the
aggregated balance sheet of Latvia's MFIs (Table 8). Due to slight accounting methodology
differences, the sum of the inter-MFI positions is not always zero; therefore, the balance is
reported under the item Excess of inter-MFI liabilities.
2) Aggregated balance sheet of Latvia's MFIs (excluding Latvijas Banka) which is the sum
of the harmonised balance sheets (Tables 9ab);
3) Information characterising foreign assets and foreign liabilities of MFIs (excluding
Latvijas Banka; Tables 11ab), including selected items in the monthly financial position
report of MFIs (excluding Latvijas Banka) by group of countries (Table 12);
100
June 2017

4) Information characterising the maturity profile and types of deposits (including repo
agreements) of Latvia's financial institutions, non-financial corporations and households with
MFIs (excluding Latvijas Banka; Tables 13 and 14abc) as well as government and non-
resident deposits (Table 14d). Deposits redeemable at notice have been grouped by period
of notice. Long-term deposits include deposits with the original maturity of over 1 year. The
breakdown of MFI (excluding Latvijas Banka) deposits by currency is provided in Tables
20ab;
5) Information characterising the maturity profile and types of MFI (excluding Latvijas
Banka) loans to Latvia's financial institutions, non-financial corporations and households
(Tables 15, 16ab, 17, 18, 36 and 37) as well as government and non-resident loans (Table
16c). The breakdown of MFI (excluding Latvijas Banka) loans by currency is provided in
Tables 20cd;
6) Information characterising MFI (excluding Latvijas Banka) securities holdings (Tables
19ab and 20ef);
7) Information characterising debt securities issued by MFIs (excluding Latvijas Banka;
Table 20g).
Interest rates
The interest rates calculation includes information from MFI reports prepared in compliance
with Latvijas Banka Regulation No. 133 "Regulation for Compiling Interest Rate Reports of
Monetary Financial Institutions" of 16 May 2014. Based on the methodology laid out in the
above Regulation, credit institutions, branches of foreign credit institutions and particular
credit unions registered in the Republic of Latvia have to provide information on interest
rates on deposits and loans applied in transactions with resident non-financial corporations
and households.
Information on interest rates on deposits and loans applied in transactions with non-financial
corporations and households provided by credit institutions, branches of foreign credit
institutions and credit unions registered in the Republic of Latvia is collected (Table 21).
Interest rate statistics is collected on new business and outstanding amounts. All rates
included in the interest rate statistics are weighted average rates. When preparing the interest
rate statistics, credit institutions use annualised agreed rates (AAR) or narrowly defined
effective rates (NDER) and annual percentage rate of charge (APRC). Credit institutions
have to select the calculation of the AAR or the NDER based on the terms and conditions
of the agreement. The NDER can be calculated on any deposit or loan. In addition to the
AAR or the NDER, the APRC is reported for loans to households for house purchase and
consumer credits.
The interest rates on new business with overnight deposits and deposits redeemable at notice
and on their outstanding amounts coincide.
Interest rates on new loans are reported on the basis of the initial rate fixation period set in
the agreement, whereas overdraft interest rates are reported on loan balances.
When reporting the interest rates on consumer credit and other credit to households with the
maturity of up to 1 year and loans to non-financial corporations with the maturity of up to
1 year, interest rates on overdraft are included.
Interbank market lending interest rates (Table 23) are reported as weighted average interest
rates on new business, aggregating the information submitted by credit institutions, prepared
based on the methodology of Latvijas Banka (see Latvijas Banka Regulation No. 102
"Regulation for Compiling the 'Report on Monetary Market Transactions'" of 16 May 2013).
101
June 2017

Information characterising the foreign currency selling and buying transactions is reported
based on the methodology of Latvijas Banka (see Latvijas Banka Regulation No. 36
"Regulation for Purchasing and Selling Cash Foreign Currency" of 13 May 2009 and
Latvijas Banka Regulation No. 101 "Regulation for Compiling Reports on Foreign Currency
Purchases and Sales" of 16 May 2013). The principal foreign exchange transactions (Table
24) comprise the cash and non-cash transactions conducted by credit institutions and
branches of foreign credit institutions, reported by transaction type and counterparty, and
currency. Non-cash foreign exchange transactions (Table 25) comprise non-cash transactions
performed by credit institutions and branches of foreign credit institutions, reported by major
currency.
The euro reference rates published by the ECB (Table 26) are reported as monthly
mathematical averages. Weighted average exchange rates (cash transactions; Table 27) are
reported based on the information provided by credit institutions and branches of foreign
credit institutions as well as currency exchange bureaus.
102
June 2017
Foreign exchange and exchange rates

Macroeconomic Developments Report, June 2017

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