Ilustratīvs attēls
As we all know, Latvia is not among the richest of the EU countries, see Figure 1. Nothing new there. Over the years I have seen many calls for faster catching up, not least with the Nordic countries, which are affluent countries with mostly good infrastructure and institutional development. The most recent example I have seen is from Progresīvie but they are certainly not alone.
At the moment, Latvia’s GDP per capita is 54% of that of Denmark, 59% of that of Sweden and 64% of that of Finland.
Full catching up is thus not around the corner but is it even realistic? Historical data say no, see later.
Figure 1: GDP per capita (USD) at Purchasing Power Standards, IMF projection for 2022, EU27 + UK
Source: IMF World Outlook Database
Latvia has achieved quite a bit of partial catching-up since independence. In Figure 2 I look at Latvian GDP per capita as a share of that of a selection of countries. Latvia overtook Greece in 2016, has come from some 23% of the Italian income level in 1992 to almost 80% while the country has reached about 60% of the levels in Germany and Sweden. I find this impressive but what about the remaining 40%?
