Republic of Latvia
Latvia is a Baltic economy at the crossroads of Northern and Eastern Europe, recognized for its export-driven structure, advanced digital infrastructure, and strategic transit position. In 2024, real GDP declined by approximately 0.4%, impacted by geopolitical tensions and uncertainty. The economy showed signs of recovery, fueled by rising wages and private consumption, while investments and exports remained under strain.
Economic overview
Latvia's economy is primarily shaped by the services sector, contributing over 60% of GDP and employing more than 70% of the workforce. Industry—including manufacturing, construction, metallurgy, food processing, and mechanical engineering—is also significant, though industrial output contracted in 2024. Agriculture, forestry, and fishery posted moderate growth. Logistics, financial services, and ICT are key pillars, with Latvia serving as a vital transit hub between Europe and Asia.
Key economic indicators
Real GDP change: –0.4% in 2024
Sector performance: services up slightly, industry and manufacturing declined, agriculture and forestry saw modest increases
Private consumption supported recovery, while investments fell significantly due to high financing costs and weak external demand
Business environment
Latvia benefits from a stable, EU-aligned regulatory framework, a developed financial services sector, and comprehensive digital public services. Strategic initiatives focus on innovation, green energy, and strengthening resilience through technological advancement in logistics and port operations.
Key sectors for investment
Services: finance, ICT, logistics and transport
Advanced manufacturing: railway equipment, electronics, food processing, metallurgy
Green energy: hydropower, wind, biomass, with targets for renewable energy expansion
Innovation and digital infrastructure: smart ports, digital services, innovation ecosystems
Knowledge-intensive bioeconomy and biomedicine emerging as promising future investment areas
Investment advantages
Strategic geographic location with robust transport corridors
Diversified economy with a strong services sector
High digital maturity and supportive public administration
Opportunities in renewable energy and sustainable technologies
Emerging sectors with growth potential in innovation and bioeconomy
Conclusion
Latvia offers a resilient and diversified economic landscape grounded in services, logistics, industry, and innovation. Despite short-term contraction, structural strengths and strategic initiatives underpin its potential for sustainable growth.
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