Translated using ChatGPT service.
This year, Latvia's economic development continues to be influenced by the geopolitical situation and uncertainty, high prices, and rising bank interest rates. Neighboring countries face similar challenges, particularly with the complex situation in export markets, inflation, declining private consumption, and the impact of the European Central Bank's (ECB) monetary policy. External trade is also adversely affected by a lack of investment in industry, hindered by low demand. The manufacturing sector across the Baltics is recovering slowly, with positive trends currently observed in Lithuania, and it is expected that the situation will also improve in Latvia and Estonia. The tourism sector in the European Union is also experiencing relatively slow recovery and growth in the post-Covid period.
On April 23, 2024, the government supported the Ministry of Economics' proposal to reallocate funding within the ministry's budget programs, directing an additional €6 million annually towards export promotion and investment attraction activities for 2024, 2025, and 2026. This aims to enhance the competitiveness and export capacity of Latvian companies both locally and internationally, promote high-tech exports, position Latvia as a hub for sustainable innovations, and boost Latvia's international recognition.
“To provide real support to Latvian companies, thoughtful and sustainable state support activities are needed, including allocating additional funding for export promotion, market reorientation, and the development of new and innovative products and services, thereby stimulating economic activity in Latvia's regions as well,” emphasizes Minister of Economics Viktors Valainis.
Within this funding framework, the Investment and Development Agency of Latvia (LIAA), in collaboration with industry associations, will implement measures to promote exports, such as procuring quality cooperation contacts in target countries, ensuring participation in international exhibitions, and more. LIAA will also attract targeted investment projects, develop competitive offers for Latvian industries, enhance sales tools and presentation materials, and conduct other activities. Additionally, over the next three years, the Ministry of Economics will undertake new export promotion and investment attraction activities, including improving the regulation for servicing priority projects, developing regulatory sandboxes, establishing a permanent regulation for large and significant events, and enhancing regulations in other areas.
By undertaking additional activities for export promotion and investment attraction, it is planned that the annual value of signed export contracts will reach €30 million, and the proactively attracted investment projects will amount to at least €35 million in 2024, and €80 million in both 2025 and 2026. It is also planned that the number of foreign tourists in Latvia will increase annually, generating additional tourism and event export revenues of at least €41 million in 2024, and at least €50 million in 2025 and 2026.
Detailed information about the Cabinet of Ministers' order project "On Appropriation Reallocation" can be found on the Legal Acts Portal.