This year, the gross domestic product (GDP) in Latvia is expected to grow by at least 2.3%, but prevailing uncertainty may restrict its potential growth, according to bank economists. Daina Paula, an economist at the Bank of Latvia, mentioned that the positive sentiment among economic participants and the reduction of uncertainty surrounding global trade policies, anticipated by the second half of 2025, might have already been somewhat forgotten. However, these factors, alongside a revival in lending, contributed to economic growth, with a reported 0.6% increase in GDP during the fourth quarter of 2025 compared to the previous year.

Significant growth was noted in sectors such as trade, financial services, and manufacturing in the fourth quarter of the previous year. This growth in consumption was fueled by rising incomes and more active lending, which remained attractive despite interest rates held steady by the European Central Bank (ECB). The overall GDP for the year was 2.1% higher than the previous year, showcasing resilience in the Latvian economy amidst fluctuating market conditions.

As the global economic landscape continues to change, the potential for growth in Latvia will depend heavily on external factors and the domestic response to ongoing uncertainties. If the positive trends in consumption and lending can be sustained, Latvia may navigate these challenges effectively, but the increasing unpredictability of the international market could present significant hurdles ahead, affecting future forecasts and economic strategies.