Latvia overview

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In Latvia we focus on:

Supporting investments in energy security and energy efficiency. The EBRD is focussing in particular on promoting and financing new renewable energy generation capacity and improving energy efficiency.

Strengthening the financial sector. The EBRD has played an important role in restructuring and turning around the systemically important Parex bank. Further engagement in the financial institutions sector will focus on strengthening financial sector stability as well as supporting credit recovery, developing private equity and mezzanine capital financing, particularly to SMEs.

Improving the competitiveness of the export sector. The EBRD is prioritising support for export--oriented firms as well as for cross-border investments by Latvian companies elsewhere in the Baltics or CIS region. The Bank is paying particular attention to supporting investments designed to improve energy efficiency in order to further boost competitiveness.

Policy dialogue. We are conducting policy dialogue with the Latvian authorities with regard to ongoing reforms in the financial sector in close cooperation with the European Commission. The EBRD is continuing to support the improvement of corporate governance in Latvia, particularly in unlisted and state-owned enterprises. In the public sector, policy dialogue is focussed on improving procurement and increasing transparency. Efforts continue to encourage the development of PPPs and supporting legislation, in particular with regard to roads and other infrastructure.

As well as being a country where the EBRD works, Latvia is also an EBRD donor. Latvia takes an active part in the Eastern Europe Energy Efficiency and Environment Partnership Fund and has contributed €85,000 for activities in Ukraine.

The EBRD’s latest strategy for Latvia was adopted on 15 September 2021.

Latvia 's policy response to the coronavirus crisis

The EBRD is monitoring Latvia 's policy response to the coronavirus pandemic. Our biweekly publication identifies the major channels of disruption as well as selected impact and response indicators.

Learn more

EBRD forecast for Latvia’s real GDP growth in 2021 4.5%

EBRD forecast for Latvia’s real GDP growth in 2022 5.5%

Despite contracting in the first quarter of 2021, GDP growth reached 5.2 per cent, year-on-year, in the first half of this year, which allowed the Latvian economy to reach the pre-crisis level. Increases in inventories contributed the most to the recovery, followed by recovering private consumption and investment, in line with the removal of the majority of restrictions in the second quarter of 2021. The labour market continues to tighten, despite some increase in unemployment rates, reflecting labour shortages and sharply rising wages.
In the first half of 2021, nominal wages jumped, on average, by nearly 10 per cent, substantially boosted by increases of public sector and minimum wages. Compared to its Baltic peers, Latvia remains relatively resistant to vaccination against Covid-19, with only 54 per cent of people receiving at least one dose of the jab. A lack of herd immunity creates a risk for new lockdowns, temporarily re-introduced in October 2021, aggravated by potential new variants of the virus.

Latvia in the EBRD’s 2021-22 Transition Report


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