Latvia Economic and Defence Update
SOLID GROWTH, FISCAL BUFFERS AND HIGH
PREVIOUS YEARS
PUBLIC INVESTMENTS IN
Moderate deficits and solid growth during 2012 -2019 contributed to public debt reduction
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Since 1995 Latvia's GDP per capita (PPS, 1995=1) has
experienced significant increase relative to EU average
Change in GDP per capita (1995-1) current prices, purchasing power standard
(PPS, EU27 from 2020)
Moderate deficits and solid growth during 2012 -2019
contributed to debt reduction by 10 pp in 8 years thus building
fiscal buffer for next challenges
General government budget balance (% of GDP)
2008 2009
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
2022
2.0
0.0
-2.0
-4.0
-4,3
-6.0
-8.0
יווי
0,0 -0,8 -0,8 -0,6
-1,2 -1,6 -1,4
-1,4
-4,3
-4,7
-7,0
-8,6
-10.0
-9,5
■One-off measures (Covid-19, energy etc.)
-12.0
13
Source: Eurostat
6.0
5.5
5.0
4.5
4.0
3.5
3.0
2.5
Source: Eurostat
1995
1996
1997
1998
1999
2000
2001
2002
2008
2009
2010
2011
2012
2013
L
2014
2015
2016
2017
2018
2019
2020
2021
Debt reduction has been achieved without compromising
levels of public investment, which is above EU average, even
netting out EU support
2003
2004
European Union - 27 countries (from 2020)
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Latvia
2019
2020
2021
LV Gross fixed capital
formation, % of GDP
50.0
45.0
40.0
35.0
30.0
LV Gross fixed capital
25.0
formation net of LV
20.0
capital transfers
11.9
15.0
10.0 8.4
receivable from EU
institutions, % of GDP
10.0
5.0
EU27 Gross fixed
capital formation, %
0.0
of GDP
2005
2006
2007
Source: Eurostat, Law on State Budget for 2023 and budgetary framework for 2023-2025
18.5
37.0
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
47.6 45.1
43.6
42.0
42.4
41.6
40.3
37.0
40.3 38.9 37.0 36.5
40.9
Latvia general government debt development (% of GDP)
Source: Eurostat, Law on State Budget for 2023 and budgetary framework for 2023-2025, February 2023
2020
2021
2022FView entire presentation