Macroeconomic Review
October 2023
After the rapid recovery of the economy from the Covid-19 pandemic crisis in 2021, growth in Latvia slowed down to 3.4% in 2022. The economic development in 2022 was significantly affected by the supply chain disruptions caused by the Russian invasion of Ukraine, the rise in inflation caused by energy and food prices, as well as the decrease in global demand.
In 2023, the economic development continues to be affected by the geopolitical situation and uncertainty, high prices and rising bank interest rates. In Q1 of 2023, economic growth ceased. However, in Q2 of 2023, GDP already declined by 1.1% compared to the corresponding period last year. In the first half of 2023, GDP was 0.6% lower than a year ago.