The Ministry of Economics, in cooperation with industry organisations and based on the views and experience of the 'Latvian Builders' Partnership' association, State Real Estate (VAS Valsts nekustamie īpašumi) and the Latvian Construction Council, has developed Guidelines for the indexation of construction costs. The guidelines are primarily designed for the indexation of construction contract prices; however, a contracting authority may also apply similar principles to other public construction service contracts.

The purpose of indexation is to manage and mitigate the risks of price changes (inflation or deflation) in the construction sector. Contract price indexation is an effective instrument for managing risks associated with fluctuations in labour costs and resource prices in construction contracts. The inclusion of regulations on construction contract price indexation in construction contracts will allow the contracting parties to flexibly adapt to fluctuations in the construction market.