Economic growth this year could be close to 2% / day

According to the Central Statistical Bureau, the gross domestic product (GDP) decreased by 0.4% compared to the fourth quarter of 2023 in the fourth quarter of last year.

Although the salary continued to grow in 2024 and inflation declined, the relaxation was observed in Latvia's foreign trade flows as well as in the dynamics of investment. Overall, GDP decreased by 0.4%last year.

Last year, GDP growth was adversely affected by a reduction in the manufacturing sectors by 2.8%. A slight increase of 0.4% was observed in the service sectors.

At the same time, agriculture reported by 12.1% in the fourth quarter of 2024, financial and insurance activities increased by 12.8%, the education sector increased by 7.3% and accommodation and the catering industry increased by 4.4%.

The relatively rapid decrease – by 22.8% – was in the industry in other industries, and the construction industry decreased by 10.7%.

Economic activity is expected to increase in 2025. According to the forecasts of international organizations, in 2025 the global economic environment will slightly improve, which will facilitate the restoration of activity in Latvian exports.

The situation in the eurozone, including Latvia, will also improve lower interest rates to help strengthen consumption, real estate market and construction. The European Union (EU) fund investment growth, as well as reforms in strengthening competitiveness, including lower labor taxes, will also have a significant impact on the Latvian economy, Skriban predicts.

He points out that this year there will be different development trends in different sectors. More availability of loans for private construction projects, as well as availability of EU investment, will facilitate the construction industry and employment opportunities.

It is also expected to gradually recover from the trade industry, which will be affected by an increase in foreign trade flows and the dynamics of the wholesale industry. In turn, the retail sector will be affected by the expected growth of private consumption.

The manufacturing industry will also return to positive growth rates, which will mainly be influenced by improvement of export opportunities, Skriban predicts.

The unclear situation with the Russian war in Ukraine will stimulate companies to look for new outlets, while internal demand -oriented industries will be affected by the purchasing power of the population.

It has already been reported that Latvia's gross domestic product (GDP) decreased by 0.4%at constant prices last year, compared to 2023, including in the fourth quarter, according to Seasonal and Calendar Data, according to GDP by 0.4%, according to the Central Statistical Bureau (CSB).

At the same time, in the fourth quarter of 2024, compared to the previous quarter, the third quarter of 2024, according to seasonal and calendar adjusted data, Latvia's GDP increased by 0.1%.