In 2025, the Ministry of Economics (MoE) achieved ambitious investment goals within its areas of responsibility, with EUR 3.7 billion invested in the national economy. Active work continued to support businesses in promoting exports, competitiveness, productivity, digitalization, and energy efficiency. Several support measures were also implemented to improve housing availability and enhance citizens’ welfare.
With the support of the Investment and Development Agency of Latvia (LIAA), decisions were made on investments in Latvia with a total value exceeding EUR 870 million. Within the MoE’s support programs, EUR 270 million was allocated to strengthening the defense industry. Overall, by 1 December, at least EUR 713 million had been invested from European Union funds and the state budget, along with at least EUR 400 million in private investments. Projects worth EUR 263 million have been launched within low-rent housing construction support and building insulation programs. By the end of October 2025, commercial bank lending had increased by nearly 11%, or EUR 1.6 billion, compared to December 2024.
“Again this year, the Ministry of Economics has actively worked to promote national economic development and competitiveness in the broader region. We have provided substantial support to businesses to enhance exports, competitiveness, and productivity. Various support measures for citizens have also been implemented to improve public welfare, including measures to reduce food prices, support access to affordable housing, and maintain assistance for large families,” emphasizes Minister for Economics Viktors Valainis.
To ensure regular dialogue between the legislature and the executive on strategic national economic development issues, the Ministry of Economics’ report “On Latvia’s Economic Development” was discussed in the spring during the Saeima economic debates. The report presented a vision for making Latvia a competitive and resilient player in the global market, analyzing five strategic areas as the basis for growth: defense industry, green energy, capital market development, regional growth, and modern governance. It also included specific 2025 investment targets for Latvia’s economy.
A “Plan of Action for Investment Attraction and Financial Accessibility in the Economy” was developed and approved by the Cabinet of Ministers, aiming to increase the outstanding loans to non-financial corporations from 14% to 17% of GDP by 2029 and raise accumulated foreign direct investment in Latvian companies’ equity to EUR 32 billion.
With the introduction of a performance-based budget, all budget programs and performance indicators were reviewed.
In 2025, a reform of the Central Statistical Bureau began. As a result, 4,000 companies were relieved from reporting requirements this year, saving nearly 10,000 working hours for businesses. Further changes will continue in 2026 to reduce the administrative burden on businesses. The reform also plans to reduce staff by 79 positions while increasing efficiency and introducing automated data processing solutions.
Activities were implemented at the EU level to improve the Single Market and reduce administrative burdens. In collaboration with Estonia and other countries, a vision for simplifying EU-level legislation was developed in the summer of 2025 under the Friends of Simplification informal group, including a concrete list of EU legislative initiatives to be improved or repealed to reduce administrative burdens and barriers in the Single Market. The process also identified the ten most significant barriers (“Terrible Ten”) that have hindered full functioning of the EU Single Market.
Rules for creating and maintaining national strategic petroleum reserves were established, covering all three types in Latvia: state-owned reserves, transitional solutions for service procurement to establish reserves, and aviation industry-maintained reserves, allowing the sector to optimize reserve-related costs.
Work continued on implementing Cabinet Order 01.11.2024 to optimize office space occupied by the Ministry of Economics and related institutions, with plans to relocate to the state office building at Talejas Street 1, Riga in 2026.
Support for Businesses
The development of the Latvian economy in 2025 continued to be influenced by geopolitical circumstances and Russia’s war in Ukraine. The MoE developed and implemented support instruments to strengthen Latvia’s defense industry, providing at least EUR 270 million for 52 military projects, including support for dual-use products and technologies. An informational report on establishing a new artillery production facility in Latvia was prepared and approved by the Cabinet, planning the creation of a joint venture in Latvia. The project is expected to attract over EUR 200 million in investments, with exports from the facility potentially exceeding EUR 3 billion over ten years.
A “green corridor” for businesses was introduced to access public services more quickly through a single contact point, managed by LIAA.
Amendments to the Labour Law were submitted to the Saeima. The Human Capital Development Council, in cooperation with business associations, analyzed proposals to improve existing legislation and better align it with current labor market conditions.
The MoE implemented various support measures outside the Riga region to promote local entrepreneurship and municipal economic development. On 23 September 2025, the Cabinet-approved support program “Procedure for Granting Support to Strengthen Local Municipal Economies” came into force. A total of 45 municipal projects were supported with EUR 8.5 million.
In 2025, 14 foreign film production projects were supported, with expected exports of EUR 61.8 million, including EUR 14.6 million in co-financing.
Support for Citizens
An action plan was implemented to improve the availability of everyday food products and reduce bureaucracy in the retail sector. On 27 May 2025, a Memorandum on Food Trade was signed, in which the parties committed to measures to increase the assortment of locally produced food products, expand their sales, and improve access to basic food for households, especially low-income families. A low-price product basket was introduced, and cooperation between retailers and producers was enhanced.
In October 2025, under the “Mortgage Lending in the Regions” program, loans began to be issued. By 1 December, ALTUM had received 131 applications for funding totaling EUR 5.1 million. The program aims to support approximately 3,000 households in Latvia.
Funding for the low-rent housing construction support program was doubled in 2025 due to growing developer activity and demand—from the original EUR 42.9 million from the Recovery Fund in 2022 to EUR 84.4 million in 2025. Amendments to program rules are currently under review to increase total funding to EUR 101.8 million, allowing the construction of approximately 1,140 apartments.
To reduce construction bureaucracy, the Unified Building Registration Process will begin on 6 January 2026. The process will be fully digital and operate according to a one-stop-shop principle: starting in the Construction Information System (BIS), continuing in the Cadastre Information System, and concluding in the Land Register. Data will be transferred automatically and sequentially between systems, reducing administrative burdens for citizens, businesses, and public authorities alike.