READ full country note (PDF)
Economic growth is projected to pick up in 2017. Stronger growth in the euro area and Russia will support exports, which, along with the disbursement of EU funds, will boost investment. Household consumption will be robust, supported by strong wage growth. However, unemployment will remain high, reflecting regional and skill mismatches between workers and jobs. Higher energy prices will raise inflation somewhat and reduce the current account surplus.
The fiscal stance is expansionary, reflecting in part additional healthcare spending. Inclusive growth could be strengthened by reducing out-of-pocket payments in healthcare services for poor households and by reducing labour taxes on low-income earners. Increasing access to vocational and tertiary education would improve economic opportunities for youth from low-income families.
Latvia’s participation in global value chains is limited. Enhancing cooperation between small and medium-sized enterprises and research institutions would boost innovation and raise competitiveness in global value chains. Providing more training for the unemployed, combined with better income support, would help to ensure that the benefits of globalisation are widely shared.
Economic Survey of Latvia (survey page)