“The year 2025 in the economy is better than the previous four,” said commentator Maris Krautmanis in Neatkarīgā.
“Inflation in the Baltic states this year has been higher than the average in the eurozone, where it reaches about 2%. In Latvia and Lithuania, it is just over 4%, while in Estonia it is 5%.”
“Additional pressure on inflation in Latvia compared to 2024 has come from rising food and energy prices. Estonia has had the highest inflation in the eurozone since April. Latvia's national debt will reach 20.5 billion euros, or 49% of its gross domestic product, by the end of 2025. This is currently one of the lowest in the eurozone, but higher than in Lithuania. And it is difficult to compare with Estonia – in percentage terms to GDP, Latvia's debt is twice as high. However, Estonia is the European champion in 'not borrowing' – the most cautious of all countries.”
“There are still some things where Estonia differs from Latvia,” the commentator continues. “The VAT rate of 22% for most goods and services will remain in Estonia until July 1, 2026, after which VAT will increase to 24%. The Estonian government calls this VAT increase a temporary defense tax. In comparison, Latvia's VAT remains at 21%, and reduced VAT rates have also been introduced for a number of food products. It is likely that significant tax changes will not be made at least until the elections to the Saeima.
It cannot be said that no taxes in Latvia will increase at all. Next year, excise and natural resource tax rates will rise; however, tax increases are not the main method of generating revenue in the budget. Currently, the primary method in Latvia is borrowing. Time will tell which method – the Estonian or the Latvian – will prove to be more correct.”
Nikita KRASNOGLAZOV flipped through the press
