Cycle heatmap

Quarterly the Council, similarly to other EU member states' independent fiscal institutions, prepares the Latvian economy cycle heatmap.

Observations from 2000 1st quarter till 2019 4th quarter available in MS Excel format here.


The situation in the labour market remains tense. Although wage growth remained stable throughout 2019, it was not as intense as in 2018. Looking back to the pre-crisis period of 2007, the situation in 2019 can be described as moderate against a background of very low unemployment. While employment remains high, the number of vacancies remains high at the end of 2019.

In the real sector, capacity utilization declined gradually over the year, especially in the industrial segment, which may be related to a significant drop in activity in the wood processing industry. The demand in the construction sector also gradually declined, while that in the services sector remained stable.

Under conditions of growing external uncertainty, sentiment indicator in the economy continued to fall throughout 2019, suggesting that business as a whole was expecting a worsening economic environment. Lending activity remained very low throughout the year as a result of the enhanced supervision of the banking sector through the implementation of the MONEYVAL recommendations and the circumstances that led to it. Core inflation remained low throughout 2019 while housing prices continued to rise moderately.

The composite economic cycle heat index indicates that 2019 marked the start of the economic cycle cooling phase, while overall the Latvian economy maintained the inertia of growth accumulated in previous years.



Last modified : 7 October 2020