Latvia - Market OverviewLatvia - Market Overview
Latvia is a member of the European Union, NATO, Eurozone, and the Organization for Economic Cooperation and Development (OECD).
Geographically, Latvia is a natural gateway between the United States, the EU, Russia, and Asia, with highly developed port, rail, and other transport infrastructure.
Latvia provides various tax, labor, and R&D incentives to foreign investors.
Latvia offers significant cost advantages to investors, including competitive labor and real estate expenses and competitive tax rates.
Foreign and domestic investments in Latvia are treated equally under the law.
According to the European Commission, Latvia’s GDP grew by 4.8 percent in 2018 and is forecast to grow by 3.1 percent in 2019.
According to the U.S. Census Bureau’s Foreign Trade Division, the main exports to Latvia from the United States in 2018 were civilian aircraft, computer and electronic products, and alcoholic beverages.
Latvia’s main trading partners are Lithuania (16.81% of Latvia’s total trade turnover), Estonia (9.31%), and Germany (9.03%), while the United States is the 12th largest partner in trade in goods. In 2017, Latvia’s biggest trading partners were Lithuania (18% of Latvia's total trade turnover), Germany (9%), Estonia (9%), Russia (8%) and Poland (7%).
The EU spring forecast released on 7 May 2019 predicts that economic growth will slow down mainly due to decreases in investment growth, but the transition from economic recovery to expansion will continue. The EU area grew by 1.9% in 2018, and is expected to grow by 1.5% in 2019. The Euro area real GDP is forecast to grow by 1.2% in 2019, which is 0.7% lower than predicted in the 2018 autumn forecast and below its long-run trend for the first time since 2013.