Latvia
A contraction in external demand and investment resulted in GDP stagnating in Q1 2024. Looking ahead over the year as a whole, the economy will recover, though by just 1.6%. The main growth driver will be planned investment, financed from the NextGenerationEU programme; meanwhile exports will revive only gradually, since EU – and particularly German – industrial activity will remain subdued. Consumer price inflation is about to decline further and will be 1.5% on average this year, while a gradual rise is to be expected in the coming years. Real incomes are increasing quite swiftly again; thus, we will see private household demand revive somewhat more rapidly in the second half of 2024. Given the fairly low growth, the public deficit will amount to 3% of GDP this year. The labour market remained quite tight last year; the unemployment rate is expected to increase slightly to 7% in 2024 and thereafter to decline again. In the coming years, growth is projected to pick up to 2.5% in 2025 and 2.7% in 2026.
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FORECAST* |
| Main Economic Indicators | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 |
| Population, 1000 persons | 1884 | 1879 | 1877 | . | . | . |
| GDP, real change in % | 6.7 | 3.0 | -0.3 | 1.6 | 2.5 | 2.7 |
| GDP per capita (EUR at PPP) | 23210 | 25420 | 26590 | . | . | . |
| Gross industrial production, real change in % | 6.6 | 0.9 | -5.6 | . | . | . |
| Unemployment rate - LFS, in %, average | 7.6 | 6.9 | 6.5 | 7.0 | 6.7 | 6.4 |
| Average gross monthly wages, EUR | 1277 | 1373 | 1537 | . | . | . |
| Consumer prices, % p.a. | 3.2 | 17.2 | 9.1 | 1.4 | 2.2 | 2.7 |
| Fiscal balance in % of GDP | -7.2 | -4.6 | -2.2 | -2.8 | -2.3 | -2.0 |
| Public debt in % of GDP | 44.4 | 41.8 | 43.6 | . | . | . |
| Current account in % of GDP | -3.9 | -4.8 | -4.0 | -3.1 | -4.6 | -5.7 |
| FDI inflow, EUR m | 3166 | 1120 | 1386 | . | . | . |
| Gross external debt in % of GDP | 110.7 | 102.9 | 99.4 | . | . | . |
Basic data are continuously updated.
* Forecasts are changed beginning of January, April, July and November.
See Press Conferences.
publication_icon
Monthly Report No. 7-8/2024
Vasily Astrov, Alexandra Bykova, Rumen Dobrinsky, Selena Duraković, Meryem Gökten, Richard Grieveson, Doris Hanzl-Weiss, Gabor Hunya, Branimir Jovanović, Niko Korpar, Sebastian Leitner, Isilda Mara, Olga Pindyuk, Sandor Richter, Bernd Christoph Ströhm, Maryna Tverdostup, Zuzana Zavarská and Adam Żurawski
wiiw Monthly Report No. 7-8, July-August 2024
45 pages including 5 Tables and 12 Figures
Details
publication_icon
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
A contraction in external demand and investment resulted in GDP stagnating in Q1 2024. Looking ahead over the year as a whole, the economy will recover, though by just 1.6%. The main growth driver will be planned investment, financed from the NextGenerationEU programme; meanwhile exports will revive only gradually, since EU – and particularly German – industrial activity will remain subdued. Consumer price inflation is about to decline further and will be 1.5% on average this year, while a gradual rise is to be expected in the coming years. Real incomes are increasing quite swiftly again; thus, we will see private household demand revive somewhat more rapidly in the second half of 2024. Given the fairly low growth, the public deficit will amount to 3% of GDP this year. The labour market remained quite tight last year; the unemployment rate is expected to increase slightly to 7% in 2024 and thereafter to decline again. In the coming years, growth is projected to pick up to 2.5% in 2025 and 2.7% in 2026.
