Latvia Economic and Fiscal Outlook

11 LATVIA - MEMBER OF THE WORLD'S STRONGEST MILITARY ALLIANCE Latvia has been a member of the North Atlantic Treaty Organization (NATO) since 2004 Latvia as part of NATO Eastern flank Finland and Sweden - official NATO members soon Note: Sweden and Finland applied for NATO membership Source: NATO, June 2022, Ministry of Defence ALLIED TROOPS HOST NATION AIR DEFENCE BALTIC AIR POLICING • NATO presence in Latvia Latvia's defence and security is ensured by synchronization of the membership of NATO and EU, as well as different cooperation agreements Currently 11 nations are represented in the enhanced Forward Presence battlegroup in Latvia. There are also American and Danish units in Latvia. New baseline for deterrence and defence posture agreed in NATO Summit in Madrid scaling up existing battlegroups to brigade-size units U.S. troops will continue a robust presence in Latvia National efforts to strengthen combat capabilities and readiness (ART 3) Comprehensive state defence system Capability development: ■ Gradual increase of defence budget to 2.5% of GDP by 2025 Capability areas: logistics, supply, air defence, coastal defence, mechanization, cyber Development of new military training range Introduction of State defence service

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