Luminor Cuts Latvia GDP Growth Forecast to 1.4%
- Teh economic outlook for Latvia has been adjusted, with a reduced growth projection for the current year.
- Latvia's gross domestic product (GDP) is now expected to grow by 1.4% this year, a decrease from the previously forecasted 2.2% in September 2024.
- Lithuania's GDP is projected to increase by 2.5%, while Estonia's economy is expected to grow by 1%.
LatviaS GDP Growth Forecast Revised Downward to 1.4%
Table of Contents
- LatviaS GDP Growth Forecast Revised Downward to 1.4%
- Latvia’s Economic Outlook: Key Questions Answered
- What is Latvia’s Projected GDP Growth for 2025 and Beyond?
- How Does Latvia’s Economic Growth Compare to Other Baltic States?
- What is the Inflation and Unemployment Rate Forecast for Latvia?
- what is the Expected Wage Growth in Latvia?
- What Factors Influence Latvia’s Economic Growth?
- What is the performance of the service exports?
- How are the Baltic states performing economically?
- Key Economic Indicators Summary
Teh economic outlook for Latvia has been adjusted, with a reduced growth projection for the current year.
Latvia’s gross domestic product (GDP) is now expected to grow by 1.4% this year, a decrease from the previously forecasted 2.2% in September 2024.
Lithuania’s GDP is projected to increase by 2.5%, while Estonia’s economy is expected to grow by 1%.
Looking ahead to 2026, Latvia’s GDP is forecast to grow by 2.9%, Lithuania by 2.5%, and Estonia by 2%.
Inflation and Unemployment
Inflation in 2025 is projected at 3.3% for Latvia, 5% for Estonia, and 3.6% for Lithuania. In 2026, inflation is forecast at 3% for Estonia, 2.4% for Lithuania, and 2.5% for Latvia.
The unemployment rate in Latvia is expected to be 6.5% this year, compared to 7% in both Lithuania and Estonia. In 2026, unemployment is projected at 5.8% in Latvia, 6% in Estonia, and 6.8% in lithuania.
Wage Growth
Salaries in Latvia are projected to increase by 6.9% this year, while Lithuania is expected to see a 9% rise, and Estonia a 6% increase. In 2026, salaries in Latvia are forecast to grow by 8.3%, in Lithuania by 7.5%, and in Estonia by 6%.
Factors influencing Economic Growth
Several factors could potentially accelerate economic growth this year, but increased uncertainty may impact spending and investment decisions.
Household deposits in Latvia have reached approximately EUR 11 billion. Lower interest rates could free up financial resources and encourage lending, potentially boosting consumption, although caution remains.
Raw Material Prices and Service Costs
Fluctuations in raw material prices,such as butter,cocoa,and orange juice,are affecting inflation.Gas prices in Europe also saw an increase in the latter half of the previous year.
Service prices rose by 5% last year, and recent data suggests that wage growth in the private sector could exceed forecasts.
Household Consumption and Deposits
Increased consumption could provide more support to the economy, although caution is still present. Household deposits have shown positive growth, indicating increased purchasing power.
Accelerating household loans could further stimulate consumption.
Exports and Investments
The greatest uncertainty lies in exports. While economic factors appear favorable, potential increases in US customs tariffs relative to Europe could pose a significant challenge.
Investments, facilitated by European Union (EU) funds, are expected to be a primary driver of economic growth this year and next. Additional investment in 2025 and 2026 is projected to be approximately half a billion euros larger than last year.
The manufacturing industry has seen significant investment growth, reaching its highest point since 2011.
Sector Performance
The transport sector has seen the most pronounced investment dynamics in the last three years, followed by the manufacturing industry and public administration, the latter largely related to defense investment.
Export sectors faced challenges last year due to unfavorable conditions in key markets such as the Baltic States, the Nordic countries, and Germany. However, construction-related sectors are gradually recovering, and the wood industry saw surprisingly favorable results in the fourth quarter.
Food producers also experienced favorable conditions last year,with food processing and woodworking accounting for more than half of industrial investment. This trend is expected to continue.
The metalworking and mechanical engineering sectors faced deeper-than-expected challenges due to difficulties in the European industry as a whole.
Service Exports
A previous decline in high value-added services has been overcome, with total exports of services increasing by 19% in January. Transport services have grown by 12%,travel services by 20%,and information technology and business services by 22%.
Baltic Economic Indicators
Economic indicators in the Baltic states have shown contrasting trends, with Lithuania experiencing growth, Estonia facing a recession, and Latvia fluctuating between growth and recession.
The Estonian economy has shown improvement, and Latvia is expected to benefit from turning export sectors and public sector-funded investment. Lithuania is projected to maintain a steady pace.
Here’s a Q&A-style article based on the provided text, designed for SEO, readability, and evergreen relevance:
Latvia’s Economic Outlook: Key Questions Answered
What is Latvia’s Projected GDP Growth for 2025 and Beyond?
Latvia’s GDP growth for 2025 is now projected to be 1.4%,a decrease from the previous forecast of 2.2% in September 2024. Looking ahead, the forecast anticipates growth of 2.9% in 2026.
2025 GDP Growth: 1.4%
2026 GDP Growth: 2.9%
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How Does Latvia’s Economic Growth Compare to Other Baltic States?
The article provides a comparative overview of economic growth across the Baltic states. In 2025, Lithuania is projected to grow at 2.5%, and Estonia is expected to grow by 1%. In 2026, the projections are Lithuania at 2.5% and Estonia at 2%.
Lithuania (2025): 2.5%
Estonia (2025): 1%
Lithuania (2026): 2.5%
Estonia (2026): 2%
Related Search Terms: Baltic states economic comparison, Estonia GDP forecast, Lithuania economic growth, Baltic economies 2025
What is the Inflation and Unemployment Rate Forecast for Latvia?
Inflation in Latvia is projected to be 3.3% in 2025 and 2.5% in 2026.The unemployment rate is expected to be 6.5% in 2025 and 5.8% in 2026.
2025 Inflation: 3.3%
2026 Inflation: 2.5%
2025 Unemployment: 6.5%
2026 Unemployment: 5.8%
Related Search Terms: Latvia inflation forecast,latvia unemployment rate,Latvia economic indicators
what is the Expected Wage Growth in Latvia?
Salaries in Latvia are projected to increase by 6.9% in 2025 and 8.3% in 2026.
2025 Wage Growth: 6.9%
2026 Wage Growth: 8.3%
Related Search Terms: Latvia salary increase forecast, Latvia wage growth, average salary Latvia
What Factors Influence Latvia’s Economic Growth?
Several factors influence Latvia’s economic growth:
Household Consumption: Increased consumption could provide more support to the economy. Household deposits have shown positive growth, indicating increased purchasing power,
Investments: Investments, facilitated by European union (EU) funds, are expected to be a primary driver of economic growth, especially in the manufacturing industry.
Exports: Exports have uncertainty due to potential increases in US customs tariffs.
Related Search Terms: Latvia economic drivers, Latvia investment climate, Latvia economic challenges
What is the performance of the service exports?
A previous decline in high-value-added services has been overcome with the total exports of services increasing by 19% in January. Transport services have grown by 12%, travel services by 20%, and information technology and business services by 22%.
Related Search Terms: Latvia export analysis, Latvia service exports, Latvia IT sector
How are the Baltic states performing economically?
Economic indicators in the Baltic States have shown contrasting trends, with Lithuania experiencing growth, Estonia facing a recession, and Latvia fluctuating between growth and recession. The Estonian economy has shown enhancement, and Latvia is expected to benefit from turning export sectors and public sector-funded investment. Lithuania is projected to maintain a steady pace.
Related Search Terms: Baltic states economic performance, Estonia economic outlook, Lithuania economic analysis*
Key Economic Indicators Summary
Here’s a table summarizing key economic indicators for Latvia:
| Indicator | 2025 | 2026 |
| ——————– | —– | —– |
| GDP Growth | 1.4% | 2.9% |
| Inflation | 3.3% | 2.5% |
| Unemployment Rate | 6.5% | 5.8% |
| Salary Growth | 6.9% | 8.3% |