OECD (Organisation for Economic Co-operation and Development) published Economic Survey for Latvia 2024. According to the document the war in Ukraine has slowed the recovery from the pandemic and led to higher energy prices and disruptions in trade and supply chains, weighing on economic growth. Economic convergence had already slowed down before the pandemic, emphasising the need to accelerate structural reforms.

To address rising spending pressures related to defence, internal security, health and old age poverty, there is a need to raise spending efficiency and tax revenue, while the tax burden should be shifted from labour towards other income, property, and environmental taxes. 

Continuing to improve the quality of public governance and public services, fostering investment and innovation and addressing skilled labour shortages are key for raising potential growth. High informality should be tackled by lowering labour taxes for low-wage earners, improving tax enforcement and continuing to fight corruption.

Strengthening the powers of the Competition Council to enforce competitive neutrality of state-owned enterprises and challenge regulation that restricts competition would help to foster business dynamism and innovation. Addressing skilled labour shortages will require facilitating skilled migration and improving the quality 
of health, education and training services as well as active labour market policies.

To view the OECD Economic Survey for Latvia 2024