Latvia should abandon Russian market despite economic recession risks - Bank of Latvia

RIGA. April 12 (Interfax/BNS) - The Latvian economy should abandon the Russian market, says Martins Kazaks, President of the Bank of Latvia.

Kazaks stated on TV3 that this is primarily due to Russia's military operation in Ukraine. In addition, the Russian market will be "neither safe nor rapidly growing," for the foreseeable future, he said. Therefore, it is advisable for businesses to exit Russia and seek out new contacts or strengthen existing ones with partners in other countries.

As for the consequences of severing economic ties with Russia, Kazaks admitted that it would be economically painful, as the rate of economic growth could decrease and lead to a recession.

According to Latvian statistics, Latvia imported goods from Russia worth 108.534 million euros in January-February 2024, 6.4% less than in the same period last year. Latvian exports to Russia totaled 183.564 million euro during the first two months of the year, which is a 0.4% increase YoY.

Data from the State Revenue Service of Latvia show that the volume of grain imports to Latvia from Russia in Q1 2024 increased 39.8% compared to the same period in 2023 to 158,325 tonnes. The value of the grain was 27.007 million euro, a 6.2% decrease YoY.

Food and Veterinary Service data show that 61 Latvian enterprises imported goods from Russia and Belarus in Q1.