In investors’ view, geopolitical tension is the most significant risk to the Baltic states’ investment attractiveness over the next three years – 45% of respondents name it as one of the three main risks. At the same time, security challenges are increasingly shaping new growth opportunities in defence manufacturing, cybersecurity, energy, infrastructure and logistics, according to EY’s annual European Attractiveness Survey 2026, which analyses new foreign investment activity in Europe and investor sentiment.
The survey data show that the security factor in the Baltics has become one of the central issues in the investment environment. Geopolitical tension is named as a significant risk by 42% of respondents in Latvia, 46% in Estonia and 48% in Lithuania. This confirms that the region’s geographical position and security situation directly shape how investors perceive the attractiveness and long-term stability of the Baltic states.
“Geopolitics is currently the biggest risk for investors in the Baltics, but at the same time it is also becoming a new source of investment opportunity. Security is no longer solely a matter for the public sector – it increasingly shapes corporate strategies, supply chains, infrastructure development and technology choices too. Defence, cybersecurity, energy independence and critical infrastructure could become a key direction for Baltic competitiveness,” says Guntars Krols, EY partner for the Baltic states.
Investors also highlight cost, skills and macroeconomic risks
Alongside security considerations, investors in the Baltic states also cite rising business costs, a shortage of workforce skills and macroeconomic conditions as significant risks. In Latvia, 28% of respondents name rising business costs, including energy costs, as one of the main risks, while a further 26% of investors highlight the skills shortage. In Estonia, investors most often cite macroeconomic conditions (42%) and rising business costs (34%) among the most significant risks, while in Lithuania both risks carry equal weight – 28% of respondents name both macroeconomic conditions and rising business costs as significant.
The EY survey stresses that Russia’s full-scale invasion of Ukraine has a twofold effect on the Baltic states – on the one hand, it heightens investors’ perception of risk, while on the other it creates new investment opportunities. In investors’ view, the greatest potential is increasingly emerging in cybersecurity, energy storage, renewable energy, power-grid development, logistics and the strengthening of critical infrastructure, making these areas significant not only for security policy but also for economic development. At the same time, the survey shows that in a geopolitically sensitive region, investors are placing ever greater value on predictability – the importance of political stability reaches 24% in 2026. This matters especially at a time when investors are weighing not only costs and market potential but also a country’s ability to provide a clear direction for development.
About the survey
EY European Attractiveness Survey is a comprehensive annual study that compiles foreign investment statistics across Europe, based on the EY European Investment Monitor (EIM) database. The survey’s statistical section is complemented by investor surveys that EY conducts in partnership with FT Longitude. Interviews with 500 international investors and 150 investors in the Baltics were carried out between March and April this year.
Note: the EY European Attractiveness Survey is based on the EY European Investment Monitor (EIM) database and its methodology for tracking foreign investment projects in Europe. Methodologies and project selection criteria used in different investment surveys and statistics may vary, so the data are not directly comparable.