AGP Executive Report

EU Economy: Leaders opened a tense summit over the bloc’s 2028–34 budget, high energy costs and competitiveness, with some countries pushing to cut spending while others want more investment. Grain Trade: Prime Minister Andris Kulbergs urged an EU-wide ban on Russian grain transit, arguing exports support Moscow while attacks squeeze Ukraine’s trade; a unilateral Latvian ban could cost hundreds of millions of euros. Property Insurance: More than half of Latvian homes are now insured, up from 30.8% in 2017, but Latvijas Banka says nearly every second property remains uninsured. Riga Investment: The city approved plans for more than €22 million in Central Market upgrades, with the municipal operator tasked with securing financing and restoring the historic site. Ports: A.P. Moller Capital agreed to buy Portek, which operates terminals in seven countries, including Latvia. AirBaltic: The airline reported a €128.2 million first-half loss despite rising revenue and passenger numbers. Fintech: Latvia is stepping up efforts to become a regional hub, with more than 20 fintech licences issued this year.

Corporate Finance: Latvia’s tax authority has frozen Amber Latvijas balzams’ accounts again after creditors rejected its restructuring plan. The spirits maker reported tax debts of €28.28 million and is seeking access to funds needed to keep operating. Media Business: Delfi faces a €1.5 million lawsuit from LA.LV’s owner over alleged unpaid advertising fees. Trade and Regulation: Prime Minister Andris Kulbergs says Latvia cannot ban Russian grain transit without risking legal claims estimated at €200 million to €800 million, as transit rules fall under EU powers. Latvia’s trade figures, meanwhile, recorded double-digit growth in August. Investment and Growth: Latvia is stepping up efforts to become an EU fintech hub, with more than 20 fintech licences issued this year and LIAA working to attract more firms. The country is forecast to post the Baltics’ second-fastest economic growth this year. Industry: Grindeks is investing €1.87 million to expand medicine-packaging capacity, while fuel retailer Virši plans to take over four Astarte stations.

Corporate Strain: Latvia’s tax authority has frozen Amber Latvijas balzams’ accounts again after its legal-protection case ended; the producer reported a €28.28 million tax debt. Fintech Push: Latvijas Banka has issued more than 20 fintech licences this year as Latvia seeks to compete with Estonia and Lithuania; the sector has 127 companies and generated nearly €372 million in domestic turnover in 2024. Aviation and Growth: airBaltic posted a €128.2 million first-half loss despite higher revenue and passenger numbers, while Latvia is forecast to record the Baltics’ second-fastest economic growth this year. Costs and Investment: Latvia’s 3.2% inflation remains stable, but mortgage rates were the EU’s highest in August at 4.47%. Grindeks is investing €1.87 million to expand medicine-packaging capacity, and defence manufacturer Patria is expanding its Valmiera operations.

Fintech Push: Latvia is stepping up its bid to become an EU fintech hub. Latvijas Banka has issued more than 20 licences this year; the sector has 127 companies and generated nearly €372 million in domestic turnover in 2024. Fuel Retail: Virši-A plans to take over lease rights to four Astarte petrol stations, subject to Competition Council approval. Industrial Investment: Grindeks has invested €1.87 million in a new packaging line at its Tallinn site, easing pressure on production capacity in Riga and adding flexibility. AirBaltic: The airline’s first-half loss widened to €128.2 million, despite revenue rising 14.2% to €399.2 million and passenger numbers increasing 15%. Growth Outlook: The IMF forecasts Latvia’s economy will grow 2.3% in 2026, the Baltics’ second-fastest rate, with inflation at 3.6%.

Growth Outlook: The IMF expects Latvia’s economy to grow 2.3% in 2026, the Baltics’ second-fastest pace, before slowing to 1.8% in 2027. It forecasts inflation of 3.6% this year. AirBaltic: Revenue rose 14.2% to €399.2 million in the first half, but losses ballooned to €128.2 million, driven partly by high fuel costs. Passenger numbers increased 15% to 4.4 million. Fuel Retail: Nasdaq-listed Virši plans to take over lease rights to four Astarte petrol stations; the Competition Council has a month to decide on the deal. Fintech: Latvia’s central bank has issued more than 20 fintech licences so far this year, as LIAA steps up efforts to attract foreign firms. Pharmaceuticals: Grindeks invested €1.87 million in packaging capacity at its Tallinn plant, easing pressure on production in Riga and improving flexibility. Consumer Costs: Winter tyres are set to become more expensive after EU anti-dumping duties on Chinese imports took effect.

AirBaltic: Revenue rose 14.2% to €399.2 million in the first half, but the airline lost €128.2 million as fuel costs climbed. A U.S. bankruptcy court allowed it to maintain key contracts, insurance and customer programmes; a hearing on €35 million in financing was postponed. Trade: Latvia’s August exports grew 10.9% year on year to €1.75 billion, while imports rose 16.2% to €2.09 billion, widening the trade gap. Fintech: Latvijas Banka has issued more than 20 fintech licences this year, as Latvia steps up efforts to attract foreign firms seeking EU market access. Telecoms deal: J.P. Morgan is due €300,000 a month for work on the proposed Tet and LMT share sale. By August, consultants had cost €4.4 million, but no investor had been secured.

Trade: Latvia’s goods exports rose 10.9% year on year in August to €1.75 billion, but imports grew faster, up 16.2% to €2.09 billion, widening the trade deficit. airBaltic: A U.S. bankruptcy court has allowed the airline to maintain key aviation contracts, insurance, loyalty programmes and staff payments during Chapter 11 proceedings; a hearing on €35 million in financing is now set for October 19. Riga Balsam: Amber Latvijas balzams shareholders will consider the company’s future and possible insolvency proceedings next month. First-half turnover fell by a third to €24.6 million, while its tax debt exceeded €28 million. Telecom deal: J.P. Morgan is entitled to €300,000 a month for work on the proposed Tet and LMT share acquisition, with €4.4 million already spent on consultants by August and no investor secured. Defence industry: Patria is expanding its Valmiera operations, while a Rīga hackathon this week will bring startups and researchers together to develop autonomous defence technologies.

Riga Balsam Under Pressure: Amber Latvijas balzams shareholders will consider the company’s future and possible insolvency proceedings in early November. First-half revenue fell by a third to €24.6 million, while its tax debt topped €28 million; the company cited weaker demand and higher excise duties. Payments: Mastercard plans to require offline payment capability on new cards and terminals across Europe from 2027. Latvia already has similar functionality, which lets people pay during network outages. Food Safety: A smoked seafood trio made in Latvia has been recalled in the US over possible listeria contamination. No illnesses have been reported. AirBaltic Restructuring: The airline plans to cut up to 700 jobs as it reshapes its fleet and network. Economic Pulse: Latvia’s industrial production grew 0.3%, while inflation held at 3.2%. Retail Investment: Lidl says it has invested €420 million in Latvia over five years, paid €305 million in taxes and employs 1,100 people.

Grain Trade: Latvia and its Baltic neighbours are pressing the EU to ban Russian grain transit, arguing Moscow should not profit from exports while disrupting Ukraine’s trade. The move could carry economic costs, a concern raised in Latvia’s debate over the proposal. Public Finances: Latvia’s Finance Ministry has proposed austerity measures, while the Fiscal Council chair says a temporary bank windfall tax could help reduce the deficit. AirBaltic: The airline plans to cut up to 700 jobs as it reshapes its fleet and network, putting employment under pressure across the region. Economic Conditions: Inflation held at 3.2% and industrial production edged up 0.3% in Latvia, pointing to modest activity growth.

Corporate: Grindeks’ Lithuanian subsidiary Grindeks Kalceks received a “Strongest in Lithuania 2026” creditworthiness award, citing its financial stability and timely payments. Fintech: US-listed Exodus says its planned acquisition of Latvia-based e-money firm TigSiPay is awaiting regulatory approval from the Bank of Latvia. Defence Innovation: Latvia’s new Autonomous Centre gives companies and soldiers a way to develop ideas together before procurement, without ruling firms out of later contracts. Trade: Latvia and its Baltic neighbours are pressing the EU to ban Russian grain transit, while a Latvian analyst warns the move could affect major US commodity traders. Digital Infrastructure: Latvia’s LMT and partner Santa Monica Networks completed private 5G trials at Lithuania’s Klaipėda port, demonstrating technology for autonomous inspections and faster operations. Air Travel: airBaltic plans to cut up to 700 jobs as it reshapes its fleet and network.

Trade and Transit: Latvia and its Baltic neighbours are pressing the EU to ban Russian grain transit. A Latvian analyst warns the move could affect American commodity traders and urges a closer look at the economic costs. Defence Industry: Latvia is setting up a framework for companies and soldiers to develop defence technology together, while Patria expands its Valmiera facility. LIAA is also tasked with boosting defence exports and attracting investment. Economic Pulse: Inflation held at 3.2% and industrial production rose 0.3%; the government has ruled out a fuel excise cut despite business pressure. AirBaltic: The airline plans to cut up to 700 jobs as it reshapes its fleet and network. Retail Investment: Lidl Latvia reports €420 million invested over five years, €305 million in taxes and 1,100 jobs.

Defence Innovation: Latvia’s new Defence Ministry-backed centre gives companies and the military a space to develop technology together before procurement, without jeopardising firms’ eligibility for future contracts. Fintech: US-listed Exodus has asked Latvijas Banka to approve its acquisition of Latvia-licensed e-money firm TigSiPay; the deal still needs regulatory clearance. AirBaltic: The airline plans to cut up to 700 jobs as it shrinks its fleet and network, a major restructuring for Latvia’s aviation sector. Trade: Baltic leaders are urging the EU to ban Russian grain transit, while critics warn the move could affect trade interests and Latvia’s economy. Payments: Mastercard’s offline payment system is already deployed in Latvia and is set to become a requirement for new cards and terminals across Europe in 2027. Economic indicators: Latvia’s inflation held at 3.2%, while industrial production edged up 0.3%.

Fintech: Exodus Movement has filed for Bank of Latvia approval to acquire TigSiPay, a licensed Latvian e-money institution; the deal still needs regulatory clearance. AirBaltic: The airline plans to cut up to 700 jobs as it reshapes its fleet and network, a major blow to employment across the Baltic region. Defence Industry: Patria is expanding its Valmiera production facility, while Latvia’s investment agency says it is stepping up efforts to grow defence exports and attract investment. Grain Transit: A proposed ban on Russian and Belarusian grain transit has prompted warnings about economic fallout, including effects on US commodity traders that handle much of the trade through Latvia. Economic Outlook: Latvia’s inflation held at 3.2%, while industrial production edged up 0.3%. The Finance Ministry is also proposing austerity measures as pressure grows to rein in the deficit.

Prices: Latvia’s annual inflation held at 3.2% in September. Transport costs rose faster as fuel prices climbed, while food prices continued to fall. Business Rules: The Saeima barred Russian and Belarusian citizens from owning significant stakes or exercising decisive influence in critical infrastructure businesses. Defence Industry: Patria is expanding its Valmiera production site to build and maintain armoured vehicles, adding local capacity and jobs. AirBaltic: The airline plans to cut up to 700 jobs as it reduces its fleet and network. Clean Aviation: NorSAF and Nova Pangaea plan a Latvia plant that will turn food waste into ethanol for sustainable aviation fuel. Investment: Latvia’s investment agency says it will lead efforts to boost defence-company exports and attract investment.

Critical Infrastructure: Latvia’s parliament has barred Russian and Belarusian citizens from holding significant stakes or decisive influence in critical infrastructure, including food, heating and medicine supply chains. Payments: Mastercard plans to require offline-payment support on new cards and terminals across Europe from 2027; Latvia already has the service, which can keep essential purchases working during outages. Defence Industry: Patria is building a new Valmiera facility to produce and maintain armoured vehicles, while LIAA is coordinating efforts to help Latvian defence firms win exports and attract investment. AirBaltic: The airline plans to cut up to 700 jobs as it reshapes its fleet and network, a major blow to employment across the region. Investment: INVL has sold 2,600 hectares of Latvian forest and agricultural land to a Danish-owned buyer, with plans to reinvest the proceeds. Industrial Output: Latvia’s industrial production rose 0.3%.

AirBaltic Restructuring: The airline plans to cut up to 700 jobs as it reshapes its fleet and network, a major workforce adjustment across the Baltics. Retail Investment: Lidl says it has invested more than €420 million in Latvia in five years, creating over 1,100 jobs and paying €305 million in taxes; its 39-store network is set to expand. Trade and Ports: Russian grain transit through Latvia doubled year on year in September as exporters sought alternative routes, putting Riga, Ventspils and Liepāja in focus amid regional calls to restrict such shipments. Industry and Finance: Latvia’s industrial production grew 0.3%, while Luminor provided €1.8 million to support forestry company LIVO Mežs. Government Formation: President Edgars Rinkēvičs has asked Andris Kulbergs to lead coalition talks; Kulbergs says the new government should pursue reforms while maximizing economic impact and limiting public resources.