AGP Executive Report

Latvia Economy: Latvia’s consumer price inflation rose to 3.2% year-on-year in August, up from 2.6% in July, with transport costs accelerating to 8.6% as fuel prices climbed. Energy & Utilities: Heat suppliers are preparing for the heating season with tariffs expected to rise in October; forecasts for major cities range from 75 to 93 euros per MWh, depending on woodchip and natural gas costs. Trade & Security: Latvia expanded restrictions on Russian and Belarusian imports, banning books, newspapers and other printed materials from Sept. 1, alongside wider limits on goods that could carry war propaganda. Business & Investment: SigmaRoc agreed to buy Lithuania’s dolomite producer AB Dolomitas for €110m, adding reserves and extending Baltic operations. Defence Industry: Latvian counter-drone maker ORIGIN is showcasing its BLAZE interceptor at MSPO with a new NATO-codified warhead module developed with Poland’s WITU. International Aid: Latvia approved €100,000 in humanitarian assistance for Nepal after the late-August floods and landslides. Education: PISA results show Latvian students’ science, math and reading performance slipping to new lows, though digital skills remain relatively stronger.

Latvia-Russia Trade & Security: Latvia has expanded restrictions on imports from Russia and Belarus, banning books, newspapers and other printed materials from Sept. 1, with the measure also covering clothing, footwear, toys and sports goods, including items shipped via third countries—Riga says the goal is to curb disinformation and war propaganda while reducing economic dependence. EU Energy Market: The EU installed at least 33.8 GW of solar capacity in H1 2026, up 1.9% year-on-year, with growth supported by energy security concerns; utility-scale projects still dominate new capacity. Armenia-Latvia Business & Energy Links: Armenian FM Ararat Mirzoyan met Latvian officials and think tanks in Riga, pushing deeper cooperation on economy, energy resilience and EU integration, including the TRIPP connectivity initiative; he also visited Latvia’s Bovo GAS biogas plant, highlighting biomethane injection into the gas network. Ports & Grain Transit: Latvia’s transport ministry says ports are not refusing domestic grain, and that priority access and origin checks are being arranged for transit cargo, as policy debates continue over restrictions. Defense Supply Threat: A pro-Russian group sent threats to Latvian and other European defense suppliers, demanding a halt to arms deliveries to Ukraine or facing “shutdown by any means necessary.” Business Climate/Policy: Latvia’s Chamber of Commerce and Industry argues immigration policy should balance security with fast access for workers needed by the labour market.

Latvia–Armenia Trade Push: Armenian FM Ararat Mirzoyan met Latvian President Edgars Rinkēvičs and Foreign Minister Baiba Braže in Riga, signing a protocol to implement the EU–Armenia readmission deal and discussing ways to expand trade, investment and access for Armenian goods to EU markets. Grain Trade Shock: Latvia plans a 300% tariff on grain imports from Russia and Belarus, aiming to curb shipments via Baltic ports amid Ukraine-linked disruption of Black Sea routes. Public Transport Pressure: Latvia’s passenger carriers plan a one-day protest on Sept 16 over state underfunding of regional bus contracts, warning services could become unsustainable. Riga Airport Expansion: Riga Airport has started the next phase of a €98m terminal expansion, adding about 20,000 m² of capacity and targeting completion within 42 months. Energy & Security Cooperation: Latvenergo led a new Baltic Energy Initiative among major regional players to pursue EU-backed cross-border projects, including offshore wind, LNG/hydrogen and critical infrastructure protection. Renewables Support: Latvia expanded its household solar and battery rebate scheme, raising grant coverage for eligible families and increasing the minimum battery size for support. Retail Leadership: Lidl appointed a new CEO for the Baltics, keeping the focus on price-quality and customer experience. Hybrid Threat Context: Reports highlight Germany’s sabotage probe after power infrastructure incidents, underscoring the region’s focus on resilience and deterrence.

Armenia-Latvia diplomacy: Armenian Foreign Minister Ararat Mirzoyan is in Riga for Sept 6-7 talks with Latvia’s Baiba Braže, including press statements and a planned protocol on EU readmission cooperation, plus meetings with Latvian business representatives. Hybrid security pressure on the region: Analysts warn Europe is not doing enough against Russia’s hybrid campaign as Germany launches a sabotage probe after another power substation fire; Latvia’s angle includes calls for stronger protection of critical infrastructure. Baltic energy cooperation: 14 major energy players from nine countries launched the Baltic Energy Initiative to pool expertise and pursue EU funding for offshore wind, LNG/bio-LNG, hydrogen, carbon storage and infrastructure protection. Rail Baltica cost update: Latvia’s transport ministry reports conservation design costs for a Riga Central Station overpass span and support structure in the Daugava at about €81,414 (VAT included), with broader conservation figures also outlined. Cyber risk alert: CERT.LV and partners warn attackers are exploiting MikroTik RouterOS MikroTrick flaws to gain full admin control, urging prompt patching. airBaltic and aviation demand: Tallinn Airport set an all-time August passenger record, while airBaltic financing talks and network reshaping continue to shape Baltic connectivity. Personal finance: Latvijas Banka highlights how Latvia’s second-pillar pension already depends on market returns, with recent investment gains cited. Local economy: Latvia’s apple harvest is described as good overall, with late varieties still to be picked. Fraud crackdown: Ukraine dismantled a crypto investment scam ring that allegedly stole up to $1M monthly across 20+ countries.

airBaltic & Aviation Finance: airBaltic secured up to €257m in interim financing from bondholders, with the interest rate set at 25%, as the carrier reshapes its network around Riga. Riga Airport Expansion: Rīga Airport has begun the next stage of its €98m passenger terminal expansion, supporting growth as airlines adjust routes. Defense & Drones (Latvia): Latvia’s business leaders trained at Riga’s Drone House, reflecting how companies are getting involved in practical drone skills amid rising regional tensions. Baltic Security Tech: Lithuania plans a €5m AI-powered integrated airspace surveillance system to unify sensor data, improve drone detection, and feed warnings to authorities. Russian Grain Transit: Latvia and Lithuania are weighing a ban on Russian grain transit through their ports as shipments rise after Ukrainian drone attacks disrupt other routes. EU-Russia Hybrid Pressure: Germany is set to roll out comprehensive measures against Russian sabotage and cyberattacks, including drone protection for critical sites. Business & Economy (Latvia): Latvia’s industrial output fell 0.2% in July, while household spending is reported to have hit a record high. Tourism & Culture: PÖFF30 in Tallinn puts Baltic cinema in the spotlight, while Venice’s 83rd festival features Arab filmmakers tackling war, displacement, and collapse.

Baltic Security & Trade: Latvia and Lithuania are weighing a ban on Russian grain transit through their ports as shipments rise after Ukrainian drone attacks disrupt other routes, with Latvia set to discuss a full stop while Lithuania considers restrictions. Corporate Finance: airBaltic has secured interim financing terms of up to €257m from bondholders, with interest set at 25% per year, as the airline restructures its network around Riga. Local Business & Skills: Latvia’s “Drone House” is training executives from major companies to operate drones, reflecting growing private-sector involvement in defence readiness amid Russia-linked threats. Energy & Regional Aid: NB8 countries (including Latvia) are mobilising at least €918m in 2026 to support Ukraine’s winter energy needs, focusing on power-grid repair and resilience. Markets & Economy: Eurostat reports July retail trade volume fell 0.6% in the euro area and 0.4% in the EU, while Latvia posted a +2.5% monthly increase. Tech & Games: Riga-based Estoty announced “The Missing Tail,” a narrative co-op adventure with a “one copy for two players” model, planned for PlayStation and Xbox alongside Steam.

airBaltic Financing: Latvia’s flag carrier has lined up interim financing of up to €257m from bondholders and third-party investors, with a Sept. 11 vote and funds expected in stages to keep liquidity steady as it reshapes its network. Riga Business & Security Training: Around 20 executives from Latvia’s biggest firms trained at Riga’s Drone House, a citizen-led drone facility aimed at boosting practical defence skills amid rising tensions with Russia. Latvia Tech in Media: Veset is pitching a self-service subscription for its Nimbus cloud playout at IBC, promising faster “decision to live channel” setup for content owners. Latvia Retail Pulse: Eurostat data shows Latvia’s retail trade volume rose strongly year-on-year in July, while the euro area and EU overall cooled slightly month-on-month. Baltic Energy Cooperation: Baltic energy players signed a memorandum to form the Baltic Energy Initiative, targeting cross-border projects and funding as offshore wind and grid integration remain bottlenecks. Ukraine Winter Power Support (NB8): NB8 countries, including Latvia, pledged at least €918m in 2026 to help Ukraine’s energy sector ahead of winter, pairing short-term grid needs with longer-term resilience. Hybrid Threats Watch: Germany pushed for tighter Russian tourist visa limits after alleged sabotage linked to the Leipzig airport drone incident, underscoring how security policy is spilling into mobility and business travel.

airBaltic Financing: Latvia’s flag carrier secured agreements for up to €257m in interim financing from bondholders and third-party investors, with a Sept. 11 sign-off and funds expected in two tranches, as it reshapes its business plan and fleet. Riga Airport Expansion: RIX began the next stage of its €98m passenger terminal expansion, supporting growth at the main Baltic gateway. Latvia Economy Pulse: Latvia’s industrial output fell 0.2% y/y in July, while retail trade data across the EU showed Latvia among the stronger performers. CleanR Growth & Recycling: CleanR Grupa reported €77.6m turnover in H1 (+13%) and investments of €5.4m, while CleanR Industry will invest €3.3m to automate a packaging sorting center in Riga. Baltic Energy Cooperation: Baltic Sea energy firms signed a memorandum to deepen cross-border projects and funding efforts under the Baltic Energy Initiative, as offshore wind and grid integration remain key hurdles. Security & Business Resilience: Latvian business leaders joined drone training at Riga’s Drone House, reflecting how hybrid threats are spilling into corporate preparedness. Ukraine Winter Power Support: NB8 nations, including Latvia, pledged additional help for Ukraine’s energy sector ahead of winter, building on €918m already allocated in 2026. Tech for Media Operators: Veset showcased a self-service subscription for its Nimbus cloud playout platform, aiming to cut sales cycles for FAST/OTT channel launches.

airBaltic Financing: Latvia’s flag carrier says it has secured agreements for up to €257m in interim financing from bondholders and third-party investors, with a Sept. 11 sign-off and money expected in stages to keep liquidity through its next development phase. Latvia Economy: Industrial output in Latvia fell 0.2% year-on-year in July, with manufacturing rebounding while mining and utilities weighed on the result. Retail Pulse: Eurostat data show July retail trade volume slipped 0.6% in the euro area and 0.4% in the EU, while Latvia rose 2.5% month-on-month. Energy Cooperation: Baltic energy firms signed a memorandum to deepen cross-border cooperation via the Baltic Energy Initiative, aiming at security, expertise sharing and EU funding. Riga Business & Property: Construction is set to start on the SPORTA 2 quarter first phase in Riga, a €50m project focused on Class A offices and public space. Corporate Growth & Waste Tech: CleanR Grupa reported €77.6m turnover (+13%) in H1 2026, while CleanR Industry plans €3.3m to automate packaging sorting. Security & Trade Controls: Latvia’s State Security Service raided the Russian-language “Mnogoknig” bookshop chain in Riga over suspected EU sanctions breaches.

airBaltic Financing: Latvia’s national carrier has secured terms for interim bridge financing of up to €257m via new “super senior” bonds maturing 26 Feb 2027, with €180m expected soon after bondholder consent and €77m later, at a steep 25% annual interest rate. Aviation Infrastructure: Rīga Airport has started the next stage of its major passenger terminal expansion, adding about 20,000 sq m, with the project set to cost around €98m and funded by three lenders. Regional Connectivity: A new overland option is emerging for Baltic travel as direct Vilnius–Riga rail service has been restored and timetables coordinated to enable a through Vilnius–Riga–Tallinn trip under one ticket. Defence & Industry: Latvia hosts a Dual-Use Export Forum in Rēzekne (6–7 Sept) to link local tech firms with international defence supply chains, with 150+ business meetings planned. AI Cooperation: Nine CEE countries, including Latvia, signed the Prague AI Declaration to coordinate EU AI policy and connect regional computing capacity. EU Data Rules: Latvia’s Constitutional Court challenge highlights limits on public disclosure of minority shareholders’ personal data under EU law. Household Demand: Latvia’s household spending hit record levels in 2025, averaging €619 per person per month, up 46% since 2019. Crypto Regulation: Binance is still serving some EU customers after missing MiCA’s July 1 deadline, using regulatory provisions and routing while seeking authorization elsewhere. Public Health: Eurostat data put Latvia among the EU’s higher obesity rates, at 24.6% of adults.

airBaltic Financing: Latvia’s flag carrier has agreed terms for up to €257m in interim financing with bondholders and third-party providers, a liquidity bridge while it restructures; a bondholder meeting is set for 11 September. Airport Expansion: RIX Riga Airport has started the next stage of its passenger terminal expansion, adding about 20,000 sq m of new space and upgrading check-in, security and baggage areas. Cybersecurity: Latvia’s Consumer Rights Protection Centre (PTAC) says hackers breached its Remote Statistical Data Retrieval System, exposing contact details for 697 licensed business representatives and 34 officials. EU Data Rules: The EU Court limits public access to minority shareholders’ personal data, challenging Latvia’s constitutional complaint by 17 minority shareholders. Energy Markets: European gas prices jumped to €75/MWh, near 2022 crisis levels, as Middle East tensions and low reserves keep winter supply fears alive. Baltic Energy Cooperation: ORLEN helped launch the Baltic Energy Initiative, bringing together energy firms across the region (including Latvia) on offshore wind, LNG, hydrogen and infrastructure protection. Business Deal: XTEND and JFB Construction Holdings completed their merger, with the combined company set to trade on the NYSE as XTND from 4 September.

M&A & Markets: US-listed Apogee Enterprises will buy Riga-based Groglass for €62.5m (with €10m performance-based earnout), keeping Groglass as a key Riga R&D and production hub ahead of a planned close by November 2026. Capital Markets: XTEND and JFB Construction Holdings say the XTEND merger has received $60m in cash and is on track to close Sept. 3, with the combined company set to start trading on the NYSE as “XTND” on Sept. 4. Energy & Costs: Latvia’s wholesale electricity price averaged €80/MWh in August, with Baltic prices driven by changing wind conditions; Lithuania’s imports and exports also shifted month-on-month. EU Policy & Sanctions: EU foreign ministers backed tighter Russian travel rules after the Leipzig airport drone incident, with discussions including sanctions and visa bans for certain Russian groups. Latvia Watch: Latvia’s Consumer Rights Protection Centre shut down a data system after a security incident exposed contact details for 697 licensed businesses and 34 officials. Business Integrity: Latvia’s police are investigating alleged insolvency-services fraud involving 57 victims and losses of at least €81,304. Local Economy: Alūksne Hospital is asking residents and farmers to donate surplus produce to expand patient meals.

EU-Russia Escalation: Germany says Russia was behind an explosive drone attempt at Leipzig/Halle Airport on Aug. 4, found near a Ukrainian cargo plane and later defused. The EU’s top diplomat called it “state-sponsored terrorism,” while Berlin moves to close a Russian consulate and tighten entry rules. Sanctions & Visa Pressure: EU leaders are weighing fresh sanctions and tougher Russian tourist-visa restrictions after reports a suspect used Schengen documents. Suspects Named: Reports cite two suspects—one Russian-born Latvian and one Belarus-based Russian passport holder—though detentions may be difficult. Critical Infrastructure Worries: Germany also investigated back-to-back attacks on electricity substations, raising fears of sabotage linked to the wider hybrid threat. Latvia Business Angle: Latvia’s economy continues to track through labor and energy signals—average Q2 gross wages rose to €1,886, while Baltic electricity prices stayed volatile, with Latvia-linked bottlenecks and gas-driven pressure keeping costs elevated. Payments Innovation: Handwave expanded its Visa deal to enable palm biometrics card onboarding using tokenization and authentication.

Aviation & Restructuring: airBaltic is reshaping its summer 2027 network, cutting most at Tallinn and Vilnius while keeping Riga as the main hub, with 57 direct routes from Riga, 13 from Tallinn and 8 from Vilnius, plus higher frequencies on key routes as the airline seeks cost control and interim financing. Energy Costs: Electricity prices are set to stay under pressure as natural gas stays expensive, with August showing higher second-half prices linked to weaker wind/solar and grid bottlenecks affecting Baltic power flows. EU Sanctions & Security: EU foreign ministers are debating tougher measures after a Leipzig/Halle drone attack blamed on Russia, with talk of expanding sanctions lists and shifting toward faster, more targeted “thematic” packages. Latvia Telecom Deal Delayed: Latvia’s caretaker government says it won’t complete the buyout of LMT and Tet shares from Telia during its term, aiming instead to prepare the deal. Housing Policy: A second round of Latvia’s affordable rental public-private housing programme has been cancelled after local authorities cited unpredictable costs. Cross-Border Trade: eBay is launching its first Baltic Export Summit in Vilnius (30 Sept), aiming to connect 1,000+ regional SMEs to global ecommerce partners. Fraud Watch: Latvian police warn scammers are targeting relatives of missing people in Nepal with offers of “latest” help and clairvoyant services.

airBaltic Network Shift: airBaltic has mapped its summer 2027 schedule after restructuring, with Riga set to dominate as the main hub (57 direct destinations) while Tallinn (13) and Vilnius (8) play supporting roles, plus more frequencies and tighter connections. EU Security Coordination: EU defence ministers backed a new high-level group of senior political and military leaders (with the UK and Ukraine) to close conventional power gaps and respond faster to evolving threats. Baltic Hybrid Pressure: EU officials warn Russia is moving beyond “hybrid threats” into more physical, “kinetic” actions, including drone and airspace incursions affecting Latvia and neighbours. Latvia Migration Politics: Latvia’s coalition dispute over immigration restrictions escalated after the Interior Ministry submitted a migration recommendations package with over 70 measures, but ministries’ coordination was still incomplete. Data Centre Expansion: Tet’s new DC7 in Salaspils received Tier-3 Facility certification, making Tet the only Latvian operator with two Tier-3 certified data centres (DC7 opens 09 September). Business & Courts: Latvia’s Riga Regional Court upheld prison sentences in the Rimšēvičs and Māris Martinsons bribery case. Agribusiness Outlook: Latvian dairy producers are watching Agrone’s planned Riga and Valmiera dairy acquisition, hoping it could lift milk prices if regulators approve. Tourism Demand Signals: EU overnight stays rose 1.7% in H1 2026, while Latvia-linked regional travel interest continues to build.

Latvia Court Upholds Bribery Sentences: Riga Regional Court has upheld prison terms for former Bank of Latvia governor Ilmārs Rimšēvičs and businessman Māris Martinsons in a bribery case, with asset confiscations and recovery orders still in play. Baltic Security Alert: Latvia and Finland raised readiness after security warnings near the Russian border; NATO fighter jets were scrambled and Finland tightened air/sea traffic restrictions as a precaution. Ukraine War Spillover: Russian strikes on Kyiv and the surrounding region continued for a sixth day, killing at least nine and injuring more than a dozen, while drones and missiles also hit infrastructure and border areas. EU Tourism Keeps Climbing: Eurostat reports EU overnight stays rose 1.7% in H1 2026, with foreign tourists accounting for 48.9% of stays. Ikea Price Cuts: Ikea announced a €1.2bn Europe-wide price-reduction push to attract cost-pressured shoppers. Business & Tech in Latvia: XTEND’s XOS-powered AtlasROVER made its first post-acquisition ground deployment in Asia-Pacific, signaling expansion of Physical AI robotics software across domains. Venture Building in Riga: University of Latvia Innovation and Acceleration Centre teams joined Maxwell Centre’s Impulse programme, culminating in a pitching event. Immigration Politics in Latvia: NA demanded answers from Prime Minister Andris Kulbergs after objections to an immigration restriction plan, raising coalition tensions. Defense Industry Event: Latvia is listed among confirmed national pavilions for Korea’s integrated K-DEX 2026 ground defense exhibition in December.