The stagnation of the Latvian economy has dragged on. This year, the gross domestic product will grow by only 0.9%, while in 2025 and 2026, growth will accelerate to 2.6% and 2.9%, according to the latest forecast by Swedbank economists. The purchasing power of workers has largely recovered, but people are still cautious about their spending. A recovery in exports and private investment is expected only next year, when central bank interest rates become lower. The driving force of the economy in the first half of the year was government spending, and it is clear that this cannot continue for much longer.
