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Sorry for this clickbait – Latvia is not in what should be called “an economic crisis” but that is what an overwhelming majority of the population thinks, according to a recent survey, which I saw reported in LETA news on 5 January 2024. The results of the survey, reported by Luminor bank, looked like this:
Source: LETA news 5 January 2024
So, 82% think we are in an economic crisis whereas only 1% disagrees. But what does the economic data say?
Indeed, Latvia is in a recession, which is typically defined as at least two quarters in a row with negative economic growth and this is fulfilled since both the 2nd and the 3rd quarters of 2023 displayed negative economic growth (data for the 4th quarter is still not available), see Figure 1.
But we are talking about very minimal declines of GDP of just around one per cent on an annual basis. We can also use the graph to expand on this by noting that the economy has seen next-to-nothing in terms of growth for the past five quarters.
