After the recovery from the Covid-19 crisis, the economy started to grow again in 2021. The large-scale support measures of the government and EU funds, as well as the improvement of the epidemiological situation, contributed to the recovery of Latvia's economy, and GDP grew by 4.1% in 2021.
After Russia's invasion of Ukraine, economic growth in Latvia slowed down to 2% in 2022. The economic development in 2022 was significantly affected by supply chain disruptions caused by the war, the rise in inflation caused by energy and food prices, as well as the decrease in global demand. In the first half of 2022, the consequences of the war were not yet fully felt. The economy grew by 3.9%, compared to the first half of 2021.
The rise was influenced by the low base at the beginning of 2021 and the gradual lifting of Covid-19 restrictions. However, in the 2nd half of the year, annual growth decreased to 0.3%, as the balance of exports and imports worsened, and private consumption and investment growth rates decreased.