Latvia

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A slump in investment and export activity resulted in a recession of 0.4% last year. We expect a better showing in 2025, with growth of 1.7%. We anticipate a slight recovery in external demand, although the danger of a trade war is a downside risk. The resurgence of inflation is reducing wage growth; however, at about 6% in net terms, it will still push household consumption considerably. The government has shifted some public investment planned for 2024 to this year, while private investment activity remains sluggish. Owing to the relatively tight labour market, the unemployment rate is expected to decline again slightly in 2025 and in the following two years. In the medium term, we forecast that the economy will grow by 2.4% in 2026 and 2.3% in 2027.
        FORECAST*
Main Economic Indicators202220232024202520262027
Population, 1000 persons187918771863...
GDP, real change in %1.82.9-0.41.72.42.3
GDP per capita (EUR at PPP)249602707028110...
Gross industrial production, real change in %0.9-5.3-2.0...
Unemployment rate - LFS, in %, average6.96.56.96.86.56.2
Average gross monthly wages, EUR137315371685...
Consumer prices, % p.a.17.29.11.32.82.72.5
Fiscal balance in % of GDP-4.9-2.4-1.8-3.2-2.9-2.6
Public debt in % of GDP44.444.646.8...
Current account in % of GDP-5.5-3.9-2.1-2.9-3.6-4.5
FDI inflow, EUR m117415571191...
Gross external debt in % of GDP109.4101.998.9...


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. 1/2025

Vasily Astrov, Alexandra Bykova, Selena Duraković, Meryem Gökten, Richard Grieveson, Maciej J. Grodzicki, 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. 1, January 2025
50 pages including 6 Tables and 13 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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