Latvia

map Latvia
A rebound in investment and exports has brought GDP growth into positive territory, following last year’s recession. However, we expect only a modest upswing of 1.0% this year. External demand is recovering only slowly, while increasing inflation is damping down wage growth; however, at about 6% in annual net terms, it still supports the growth in household consumption. The government has sharply increased public investment, while private investment remains subdued. Owing to the relatively tight labour market, the unemployment rate is set to remain stagnant in 2025 and then to decline slightly over the next two years. Assuming that economic activity among the country’s main trading partners rebounds faster in the coming years, Latvia’s own economy should also pick up, by a projected 2.4% in 2026 and 2.3% in 2027.
        FORECAST*
Main Economic Indicators202220232024202520262027
Population, 1000 persons187918841866...
GDP, real change in %1.9-0.90.01.02.42.3
GDP per capita (EUR at PPP)249502720028080...
Gross industrial production, real change in %0.9-5.3-1.9...
Unemployment rate - LFS, in %, average6.96.56.97.06.86.5
Average gross monthly wages, EUR137315371685...
Consumer prices, % p.a.17.29.11.33.02.72.5
Fiscal balance in % of GDP-4.9-2.4-1.8-2.8-2.9-2.6
Public debt in % of GDP44.444.446.6...
Current account in % of GDP-5.5-3.8-1.6-1.9-3.4-4.3
FDI inflow, EUR m117415251401...
Gross external debt in % of GDP109.4101.398.4...


Basic data are continuously updated.

* Forecasts are changed beginning of January, April, July and November.
See Press Conferences.

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Monthly Report No. 7-8/2025

Vasily Astrov, Alexandra Bykova, Selena Duraković, Meryem Gökten, Richard Grieveson, Maciej Grodzicki, Ioannis Gutzianas, Doris Hanzl-Weiss, Gabor Hunya, Branimir Jovanović, Niko Korpar, Dzmitry Kruk, Sebastian Leitner, Isilda Mara, Emilia Penkova-Pearson, Olga Pindyuk, Sandor Richter, Marko Sošić, Bernd Christoph Ströhm and Maryna Tverdostup
wiiw Monthly Report No. 7-8, July-August 2025
38 pages including 5 Tables and 3 Figures

Details

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Executive summary

Olga Pindyuk
in: The Crisis is Over, but its Scarring Effects are Hindering Recovery
wiiw Forecast Report No. Spring 2024, April 2024 , pp. I-VII Details

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