The Covid-19 pandemic has significantly affected economic development on a global scale, including in Latvia. GDP in Latvia decreased by 2.2% in 2020. Thanks to the large-scale support measures of the government and European Union funds, as well as the improvement of the epidemiological situation, in 2021, Latvia's economy began to recover, and GDP increased by 4.1 percent.
When Russia invaded Ukraine on February 24, 2022, the geopolitical situation and economic development prospects worsened. Energy and food prices have risen significantly, adding to inflationary pressures at a time when the cost of living around the world was already rising rapidly in the recovery from the pandemic. War also affects the global economy by disrupting raw material supply chains.