#52026SC02142026 EU Country Report on Latvia’s Economy and Public Finances
AI-generated summary for informational purposes only. Not legal advice. See the original source for the authoritative text.
This report assesses Latvia’s economic recovery, labour market, inflation, investment, and public finances, and supports the EU’s country-specific policy recommendations. It says Latvia returned to growth in 2025, helped by stronger investment and recovering household spending, but growth is expected to slow in 2026 before improving slightly in 2027. For businesses, investors, employers, and public-sector planners, the main signal is a mixed outlook: wages and consumption are rising, investment remains supported by EU funds and defence spending, but inflation, weaker exports, and a growing budget deficit create pressure. Compliance and strategy teams should watch tax, budget, labour-cost, and public-investment decisions that may follow from these recommendations.
AI-generated summary. May contain errors. Refer to official sources for legal decisions.
Key Changes
- Assesses Latvia’s 2025 economic recovery and forecasts slower growth in 2026 with a modest improvement in 2027
- Highlights rising inflation, wage growth, improving employment, and continued investment supported by EU funds and defence spending
- Warns that Latvia’s budget deficit is expected to rise because of higher defence expenditure and labour tax reform