Ilustratīvs attēls no Pixabay.com.
The Latvian economy is currently best described at being at a standstill, which should be clear from Figure 1. Actually, not a very bad outcome given recession in some trading partner countries (e.g. Estonia, see again Figure 1) as well as geopolitically dark skies. It could be worse…
But what about future growth? To analyze this, I will first take a look at the past (!).
Figure 1: Economic growth in the Baltic economies, 2022 Q1 – 2024 – Q2
Source: Eurostat
Figure 2 (and I admit that in terms of visibility it is not the most impressive chart) shows what we are quite familiar with: Due to demographics and migration, Latvia’s population is and has been declining for years and so is the labour force as well as employment – but GDP has grown some 150% in constant prices since the mid-1990s when reliable data started being available. Absolutely not bad at all but where did this growth come from?
