Latvia Economic and Defence Update

BANKS' CREDIT QUALITY REMAINS GOOD, HOUSEHOLD AND CORPORATE INDEBTEDNESS IS LOW Prudent lending practices and low leverage of households and corporate sector supports asset quality 8% 6% 4% 2% 0% 2016 Total Loan portfolio quality Total debt*-to-GDP Lithuania Latvia 54.2% Slovenia Estonia Slovakia Italy Greece Germany Malta Austria Spain Finland Portugal Ireland Belgium Non-financial corporations Households 1.0 France 2017 2018 2019 2020 2021 2022 Netherlands Cyprus Luxembourg Share of loan loss provisions in outstanding loans 0% 50% 100% 150% 200% 250% 300% 350% -Share of loans over 90 days past due in outstanding loans *Total consolidated debt vis-a-vis rest of the economy in 2022 Q3 28 Source: Latvijas Banka's calculations Source: ECB SDW

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