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

Whereas in 2022 economic activity remained quite lively right up to the end of the year, in 2023 the effects of dwindling external demand and reluctant household consumption are dampening GDP growth. Inflation is declining significantly, so that real incomes are again increasing in H2. While public investment has been expanding this year, enterprises are in the process of running down their stocks. Given the still rather tight labour market, the unemployment rate will fall slightly in 2023 – and even more so in the coming two years. Assuming that the EU economy finds its way back on track next year, we expect a subdued revival in Latvia’s GDP growth, to 1.8% in 2024 and 2.3% in 2025.