2017 OECD ECONOMIC SURVEY
OF LATVIA
Boosting productivity and inclusiveness
September 15th 2017, Riga Latvia
Main messages
•
The Latvian econom y is growing strongly, underpinned by
progress with econom ic reform s.
•
Deeper integration into international trade is necessary to
catch up with high-incom e countries.
•
Poverty and unem ploym ent are still high. Access to jobs,
Growth has been strong
Latvia Estonia Euro area
Re a l GD P, In d e x 2 0 0 7 = 10 0
Exports have gained market share
Source: OECD (20 17), OECD Econom ic Outlook: Statistics and Projections (database).
Unemployment has fallen
U n e m p lo ym e n t ra te a s % o f la b o u r fo rce
Source: OECD (20 17), OECD Econom ic Outlook: Statistics and Projections (database).
0
Wages have grown more than prices
Source: OECD (2017), OECD Economic Outlook: Statistics and Projections (database).
Gro w th o f la b o u r co m p e n s a tio n p e r e m p lo ye e a n d co n s u m e r p rice in fla tio n
Latvia is a top reformer
Th e 2 0 17 Go in g fo r Gro w th re fo rm re s p o n s ive n e s s in d ica to r
Source: OECD (20 17) Going for Growth 20 17 edition.
Debt has fallen
D e b t a s % o f GD P
Source: OECD (20 17), OECD Econom ic Outlook: Statistics and Projections (database) and OECD National Accounts Statistics (database).
2010 2011 2012 2013 2014 2015
% %
The gap in productivity remains large
Poverty is high
Source: OECD (20 17), OECD Social and Welfare Statistics (database).
Income inequality remains high
Source: OECD (20 17), OECD Social and Welfare Statistics (database).
Higher income, better housing and better
health would raise wellbeing
Source: OECD (20 16), OECD Better Life Index- Edition 20 16.
OECD Better Life Index, from 0 (worse) to 1 (best), 2016
0.0
Income and wealth
Jobs and earnings
Housing
Work and life balance
Health status
Education and skills Social connections
Environmental quality Personal security
Subjective well-being
Latvia OECD
Credit growth is still weak
Households Non-financial corporations
Source: Bank of Latvia.
Productivity growth has slowed
Ave ra ge a n n u a l gro w th o f la b o u r p ro d u ctivity
Source: OECD (20 17), OECD Productivity Statistics (database).
0
1995-2005 2005-2016 1995-2005 2005-2016 1995-2005 2005-2016
Total Manufacturing Business sector services
Trade could boost productivity and income
D o m e s tic va lu e a d d e d p e r w o rke r e m b o d ie d in fo re ign fin a l d e m a n d , 2 0 11
17
Many workers feel under-skilled at the time of
hiring
Source: CEDEFOP (20 16), “Skills Panoram a” (http:/ / skillspanoram a.cedefop.europa.eu).
Skill shortages are holding back participation
in global value chains
Source: CEDEFOP (20 16), “Skills Panoram a” (http:/ / skillspanoram a.cedefop.europa.eu).
Few firms cooperate with research institutions
Source: Eurostat (20 16), Com m unity Innovation Survey (CIS).
Th e s h a re o f firm s e n ga gin g in re s e a rch co o p e ra tio n
Low debt recovery hampers access to credit
Infrastructure lags behind peer countries
Latvia Estonia Lithuania Finland
Pro vid e m o re ge n e ro u s gra n ts fo r s tu d e n ts a tte n d in g
Unemployment is high in some regions
Source: Central Statistical Bureau of Latvia.
0
Latvia Pierīga Riga Vidzeme Kurzeme Zemgale Latgale
%
%
High unemployment keeps poverty high
Source: Central Statistical Bureau of Latvia.
0
Latvia Riga Pierīga Kurzeme Zemgale Vidzeme Latgale
%
%
Access to affordable rental housing is low
Rent (private)¹ Rent (subsidized)²
S h a re o f re n ta l h o u s in g, lo w -in co m e h o u s e h o ld s , 2 0 14 o r la te s t ye a r
Spending on active labour market policies is
low
Source: OECD (20 17), OECD Em ploym ent and Labour Market Statistics (database).
Out-of-pocket payments in healthcare are high
Source: OECD (20 17), OECD H ealth Statistics (database)
Workers pay high fees for private pensions
% of assets under management, 2015
31
Government debt is low
Informality remains high
35
Taxes on low wages are high
Source: OECD (20 17), OECD Tax Statistics (database) and OECD estim ate of tax reform effect. Ta xa tio n o f la b o u r in co m e , 2 0 16
% of total labour compensation, single person at 67% of average earnings without children
0
after tax reform
Ra is e s p e n d in g to a d d re s s p re s s in g s tru ctu ra l a n d s o cia l
For more information
http://www.oecd.org/eco/surveys/economic-survey-latvia.htm
OECD
OECD Economics
Disclaimers:
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
