WIIW The Vienna Institute for International Economic Studies - Wiener Institut für Internationale Wirtschaftsvergleiche

With GDP declining by 3.6% the Latvian economy has experienced a milder recession than expected; however, the subsequent revival of 2021 will be restrained. Last year household consumption slumped by more than 10%, while capital investments remained afloat. For this year we see a continuation of the revival in household consumption, but also external demand. Similarly, gross fixed capital investment will gain momentum, also boosted by public expenditures. In 2021 we expect GDP to increase by 2.8%; this will be followed by strong growth of 4.2% in 2022 and a somewhat slower upswing of 3.8% in 2023.