The Ministry of Economics has prepared the 2024 Report on the Development of the Latvian Economy, which assesses the situation in the Latvian economy and forecasts the prospects for economic development.
In 2024, economic development in Latvia continued to be affected by the geopolitical situation and uncertainty, as well as by the slow recovery of export target markets.
In the first three quarters of this year, gross domestic product (GDP) was 0.5% lower than a year earlier. Private and government consumption grew, while exports, imports and investment declined. We forecast that in 2024 as a whole the economy will be close to the level of the previous year.
In 2025, meanwhile, economic activity will begin to grow somewhat more rapidly again – by 2.6%.
As forecasts by international organisations show, the global economic environment will improve slightly in 2025, which will help activity in Latvian exports to recover. The situation in the euro area, including Latvia, will also be improved by lower interest rates, which will help to strengthen consumption, the property market and construction. A significant impact on the Latvian economy will also come from the increase in EU fund investment, as well as from the reforms carried out to strengthen competitiveness, including lower labour taxes and other factors.
We have a clear vision of Latvia's future economic model and an understanding of the steps needed for faster growth. We have drawn up and submitted for consideration by the Saeima and the public a new comprehensive growth strategy for Latvia, whose main elements are raising the productivity and export capacity of Latvian companies, substantial reforms in the development of human capital, the introduction of innovation and the latest technologies, and national excellence in the fields of the green economy, renewable energy and the bioeconomy,” emphasises Minister for Economics Viktors Valainis.
To achieve the objectives set, substantial support is being provided for raising our entrepreneurs' productivity, digitalisation, energy efficiency, export capacity and competitiveness. The funding earmarked for improving business competitiveness is being channelled towards industrial zones, the creation of new high value added jobs, attracting high value added investment, economic transformation and support for export capacity. In order to achieve the objectives set, the Ministry of Economics is actively building a dialogue with entrepreneurs, non-governmental organisations and other representatives of society.
The further development of the Latvian economy over the medium term will depend on the situation in the external environment and on the progress of reforms. The greatest risk to Latvia's growth is linked to the development of the global economy, and in particular to the geopolitical situation. The further development of the European Union's common economic area will also be important. Latvia's economic advantages over the medium term will rest chiefly on the macroeconomic stability achieved, which has resulted in improved credit ratings for Latvia, as well as on the effectiveness of the planned European Union support programmes and on improvements in the business environment. Should the war in Ukraine drag on, the pace of economic recovery could be slower.
The competitive advantages of the Latvian economy are based primarily on technological factors, improvements in production efficiency and innovation, and to a lesser extent on low-paid labour and low resource prices; over the medium term Latvia's growth rates could potentially reach 4-5% a year.
Specialists at the Ministry of Economics prepare the Report on the Development of the Latvian Economy once a year, in December. The report describes the policy pursued by the ministry in the fields of the business environment, innovation and new technologies, productive investment and export promotion, as well as in energy, construction, housing policy, tourism, competition policy, consumer rights protection and elsewhere. The 2024 report, along with reports from previous years, is published on the Ministry of Economics website.
https://www.em.gov.lv/lv/jaunums/latvijas-ekonomikas-aktivitate-2025-gada-atsaks-pieaugt-straujak