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2019 OECD Economic Surveys: Latvia 2019

image of OECD Economic Surveys: Latvia 2019

Latvia enjoys strong economic growth and the catch up with living standards in higher income OECD countries continues. Much remains to be done, though, to close the remaining gap and improve equal access to social protection and economic opportunities. Latvia faces one of the fastest declines in its working age population among OECD countries due to ageing and migration. Strong productivity growth is needed to counter this demographic challenge and improve living standards faster. The Economic Survey calls for more investments in skills, research and innovation and efforts to strengthen competition. It also stresses the need for more spending on health, social protection and housing for a more inclusive society. The capacity of the judiciary and law enforcement agencies needs to be strengthened to improve trust in institutions, address corruption, high levels of informality and money laundering issues.

SPECIAL FEATURE: STRONGER PRODUCTIVITY GROWTH

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Executive summary

The economy is in a broad-based upswing led by domestic demand. Fast earnings increases are supporting private consumption. A strong rebound of investment pushed GDP growth rates above 4% in 2017 and 2018. GDP growth is expected to slow to around 3% in 2019 and 2020, as world trade weakens and investment slows to a more sustainable pace.

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