Latvia Economic and Fiscal Outlook

PUBLIC INVESTMENTS IN thus building 2023 2024 Moderate deficits and solid growth during 2012 -2019 contributed to debt reduction by 10 pp in 8 years fiscal buffer for next crises SOLID GROWTH, FISCAL BUFFERS AND HIGH PREVIOUS YEARS Moderate deficits and solid growth during 2012 -2019 contributed to public debt reduction Since 1995 Latvia's GDP per capita (PPS, 1995=1) has experienced significant increase relative to EU average 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Change in GDP per capita (1995=1) current prices, purchasing 1995 1996 1997 1998 1999 power standard (PPS, EU27 from 2020) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 0.2 -1.4-1.2 -1.6 -1.4 -0.8 -0.8 -0.6 -4.3 ון! 2.0 0.0 - 2.0 Latvia - 4.0 -4.3 - 6.0 European Union - 27 countries (from 2020) - 8.0 - 10.0 - 12.0 Source: Eurostat Debt reduction has been achieved without compromising levels of public investment, which is above EU average, even netting out EU support 6.0 5.0 4.0 ン 3.0 2.0 1.0 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 13 Source: Eurostat 2018 -4.5 -2.4 -1.8 -6.5 -7.2 2025 -9.5 ■Deficit excluding support measures Support measures (COVID, energy) Source: Eurostat, Latvia Stability Program - April 2022 -8.6 43.3 44.8 42.0 Source: Eurostat, the Treasury forecast on 26.09.2022. 60.0 LV Gross fixed capital 50.0 formation, % of GDP 40.0 30.0 LV gross fixed capital net of 18.5 LV capital transfers 20.0 11.9 revevable from EU 10.0 8.4 insitutions, % of GDP 10.0 EU27 Gross fixed capital 0.0 formation, % of GDP 2005 2006 2007 2008 2009 2010 2011 2012 47.7 45.1 42.4 40.4 41.6 37.1 36.7 2013 2014 2015 2016 Latvia general government debt development (% of GDP) 40.4 39.0 37.1 36.7 2017 2018 2019 2020 2021 2022F 2019 2020 2021

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