Latvia’s business environment in 2024 was much like its GDP dynamic – there were changes, but no significant growth. This was reported to LETA by Janis Lielpeteris, a board member at the Latvian Chamber of Commerce and Industry (LCCI).
Lielpeteris says that the export situation has been a problem for Latvian businesses because of an ever more complex geopolitical situation which was not forecast in late 2023.
The expert adds that there has been better quality in dialogue with the public administration, which is a good thing, but this has not always resulted in specific initiatives to improve the business environment.
“For years, the government has heard calls from businesses on simplifying the labour tax system and on boosting competitiveness,” Lielpeteris says. There has also been real progress in reducing the overall administrative burden and red tape.
The board member also pointed to an annual business sentiment survey, the LCCI Index, which has remained pessimistic, though data do show a cautious improvement in overall sentiments.
Lielpeteris thinks that this year’s local elections will be important in Latvia, because local governments will be proposing various financial incentives to lure businesses – something which the LCCI has long since been suggesting to policymakers.
“In macroeconomic terms, we expect positive effects from further rate cuts by the European Central Bank which, even if not major, will strengthen purchasing power in domestic and foreign markets,” the expert says.
The LCCI expert added that the European Union must work quickly to improve policies in areas such as investment, employment and innovation, with the new European Commission identifying ways to accelerate the bloc’s development.
“This may be particularly important if the new administration in the United States promptly raises the issue of trade tariffs,” Lielpeteris notes.
The LCCI has forecast stronger GDP growth in 2025 as against 2024, which could result from the faster implementation of EU-funded programmes, which have often been delayed in the past. Lielpeteris also thinks that export markets will recover slowly.
Source: BNS
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