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Country Reports

Latvia Country Report

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Risk Level

Low
Moderate
Elevated
High
Very High
Severe
Extreme

Overview

Executive Summary

Latvia’s policy-making process is largely stable, especially in terms of market-orientated policies such as improving the regulatory environment and integration within NATO, with Latvia joining NATO and the EU in 2004. Frequent adjustments to government composition and coalition arrangements, however, often impede the adoption of major reform-orientated policies. The current five-party coalition government led by Prime Minister Krisjanis Karins is likely to remain in power in the next year, but at times has extended negotiations among coalition partners because of policy differences among the five partners. Changes to ministerial posts are probable. Trade unions are likely to demand for the government's resignation over its healthcare policy but Karins does not seem likely to resign, while the coalition currently holds a stable majority.Continued efforts to tackle existing corruption and money laundering problems and to reduce the shadow economy are likely. Maintained improvements of the regulatory framework and in regard to enforcement of legislation are also very probable. Latvia has faced international pressure, especially from the US, to improve its anti-corruption efforts and money-laundering legislation and is unlikely to deviate from this policy course. Latvia remains economically vulnerable to deteriorated relations with Russia following the 2014 Ukraine crisis. Given post-2014 Russian economic and energy pressure, Latvia is likely to seek increased diversification away from Russia. Russian military aircraft activity over the Baltic Sea is likely to continue as well increased Russian naval presence in the territorial waters of the three Baltic states. GDP growth reached 5% in 2018 as the construction sector continued expanding strongly. We expect GDP growth to decelerate to around 2.6% in 2019. Growth prospects are overshadowed by declining cost competitiveness because of rising unit labour costs, weakening global demand, and trade flows with a negative effect on the manufacturing and transport sector. Nevertheless, strong purchasing power growth will continue to support private consumption.
Last update: December 5, 2019

Operational Outlook

Latvia is likely to maintain a favourable-to-businesses tax environment and increase regulatory predictability. The government is likely to continue to reduce the administrative burden. Exerting influence by the legislature and executive could be observed in the judiciary. Despite anti-graft measures, implementation remains patchy, but is likely to improve. More corruption investigations are probable. Privatisations in the energy, forestry and defence sectors are unlikely as this is prohibited by law. The country's infrastructure is good in regional terms, but still underdeveloped by West European standards. Labour strikes are peaceful and unlikely to cause business disruption..

Last update: October 25, 2019

Terrorism

Moderate

There are no known terrorist organisations in Latvia and the domestic terrorist threat is low. Nevertheless, Latvia's membership to the Schengen zone makes terrorists' movements in and out of the country easier, increasing the overall terrorism score to moderate. Potential targets include NATO military assets and exercises, foreign embassies, and busy tourist or shopping hubs. Cyber-attacks against critical infrastructure and governmental bodies, perpetrated by Russian or pro-Russian individuals or groups, are likely, especially around NATO and Russian military exercises in the Baltic region and around events such as Latvia's Independence Day in November.

Last update: November 29, 2019

Crime

Crime levels in Latvia have decreased during the past 10 years and crime is not as substantial a problem as it was in the past. Organised criminal groups are primarily involved in money laundering, human and drug trafficking, car thefts, smuggling, and cyber-crime. Organised crime is affected by two groups of factors: external – geographic location, mainly transit routes through Latvia from Asia to Western Europe – and internal – shadow economy and social stratification. Money laundering has been a severe problem for Latvia, although the authorities are increasingly focused on improving the regulatory framework in line with the wider trend across the EU. Latvia is a source and transit country for human trafficking, with the primary routes leading to Western Europe.

Last update: November 27, 2019

War Risks

Latvia's concerns about Russian expansionism have led to increased defence spending. After reaching the target of 2% of GDP, the expansionary trend is likely to stop, maintaining a stable level of around 2% in the next few years. From 2018 to 2020, Latvia allocated 2% of GDP for defence; up from 1.7% of GDP in 2017. Although Russia is unlikely to undertake a direct military offensive, it will probably continue to seek to destabilise Latvian authorities by hybrid warfare tactics (cyber attacks, propaganda, and economic coercion). Airspace and maritime border incursions by Russia are likely to persist. NATO has a de-facto permanent presence in the three Baltic countries.

Last update: November 29, 2019

Social Stability

Elevated

Non-violent protests by ethnic Russians against perceived discrimination or instigated by Kremlin-backed provocateurs have a moderate likelihood in Riga and Daugavpils. Such demonstrations are likely to attract up to a few thousand people in Riga. However, the protests are unlikely to receive overall support from the local population or to replicate the hybrid warfare seen in eastern Ukraine. Anti-refugee protests are likely in the event of an increased refugee influx. Protests by education and healthcare sector workers are likely in 2019.

Last update: October 25, 2019

Health Risk

Very high

Vaccinations required to enter the country

No vaccinations are required to enter the country.

Routine Vaccinations

Hepatitis A: A vaccine is available for anyone over one year of age. The vaccine may not be effective for certain people, e.g. those born before 1945 and who lived as a child in a developing country and/or have a past history of jaundice (icterus). These people can instead get a shot of immune globulin (IG) to boost their immunity against the disease.

Hepatitis B: A vaccine is available for children at least two months old.

Diphtheria-Tetanus-Polio: A booster shot should be administered if necessary (once every ten years).

Other Vaccinations

Rabies: For prolonged stays in an isolated region (for children from when they can walk).

Tick-Borne Encephalitis: For stays in rural zones and for hiking enthusiasts (for children over the age of one).

For Children: All standard childhood immunizations should be up-to-date. In the case of a long stay, the BCG vaccine is recommended for children over one month and the MMR (measles-mumps-rubella) vaccine for children over nine months.

Last update: April 5, 2019

Practical Information

Climate

The climate is continental in the interior of the country and slightly tempered in coastal regions thanks to the influence of the Baltic Sea. Summers are relatively hot while winters are cold. Conditions are often muddy in the spring due to melting snows.

Useful Numbers

Country Code: +371
Police: 02
Ambulance: 03

Electricity

Voltage: 220 V ~ 50 Hz

Outlets:

Last update: April 5, 2019