Latvia's economy continues stable, albeit not particularly impressive growth. It has been growing for eight consecutive quarters. The information obtained from the CSB allows for a somewhat more optimistic outlook for this year, notes economist Peteris Strautins.
The overall economic growth this year may exceed last year's figure of 2.1%, despite talks of a new crisis.
The purchasing power of the population will decline only under a highly unfavorable global scenario. A significant blow to export sectors is not expected, and investments will continue to be stimulated by European Union funds and the activation of lending.
Popular concerns about rising food prices appear to be exaggerated. Commodity markets are currently signaling only gradual changes. However, potential disruptions in raw material supplies may have a greater impact on food prices in 2027.
GDP growth in the first quarter was largely driven by three sectors: other industries (primarily energy), which grew by 21.6%, trade (+5.5%), and commercial services (+6.3%).
At the same time, the main export sectors outside of Riga — manufacturing (+1.1%), agriculture and forestry (-3.6%) — showed significantly weaker results. The economy continues to grow, but it is increasingly concentrated in the capital region.
The transport sector shrank by 8.3% year-on-year due to further declines in transit and possible weather impacts on tourism and aviation. A decline was also observed in accommodation and food services (-1.8%), although it was not as significant. Construction managed to show growth of 2.8% despite the cold weather.
The political backdrop remains concerning, but its influence should not be overstated.
For reference
Latvia's GDP grew by 2.5% in the first quarter of 2026 compared to the same period in 2025. In actual prices, the GDP volume in the first quarter amounted to 9.856 billion euros, reported the CSB.
