It is obvious that lending and the economy are interconnected. The fact that the economy is growing slowly due to insufficient lending, or vice versa – few loans are issued because the economy is growing slowly – these are two sides of the same coin. In this commentary we will try to identify why the pace of lending in Latvia is lower than in other Baltic countries, and how to break this vicious circle. Among the Baltic countries, only Latvia has a corporate loan portfolio that has decreased compared to 2010. At the end of 2010 it was 9.4 billion euros, and at the end of 2023 it was only 5.7 billion (a decrease of 40%). During the same period, Lithuania increased from 8.6 to 10.8 billion, and Estonia from 6.5 to 10 billion. In this case, it is necessary to take into account the specifics of Latvia.
