Ilustratīvs attēls
Tracking the growth performance of the Latvian economy has been more complicated than usual in the past three years due to two major shocks: a) Covid in 2020-2022 and the Russian invasion of Ukraine starting in 2022.
In this short column I will try to make an assessment of how the Latvian economy has fared since 2020 and what the future might have in store. It doesn’t look too good, I’m afraid.
The euro was introduced in January 2014, so I use GDP development since then as a starting point. Not very scientific but quite reasonable – this is after normalization of the economy following the financial crisis. Between 2014 and 2019 the economy grew on average by 3.4% per year. If we think it would have continued to do so in the absence of Covid and war, I would have the full red line in Figure 1 and GDP would have been some 31% larger now than in 2014.
