Foreign investors are optimistic about Latvia's potential for future investments

EY's annual European Attractiveness Survey, which gathers foreign investment data across Europe and evaluates investors' perceptions of European countries' investment appeal, indicates that despite a decline in new foreign investment projects last year, 44% of foreign investors are optimistic about Latvia's investment climate improving over the next three years. Additionally, 36% of foreign entrepreneurs believe Latvia's investment climate will remain stable, while 20% anticipate it will deteriorate.

EY survey data shows that foreign investors' sentiment about Latvia's attractiveness has improved over the past year. Last year, more than half of foreign investors, or 51%, expected Latvia's attractiveness for new investments to worsen over the next three years, while only one in three business leaders—35 %—expected it to improve moderately. Moreover, last year, Latvia was the only country in the Baltics for which investor sentiment was generally negative.

"Interestingly, investors are largely used to geopolitical uncertainty and do not see it as a major drawback of our region or Latvia's investment climate. Geopolitical conflicts are considered a risk to Latvia's investment climate by only 28% of the survey participants, while domestic political instability - election-related changes, legislative unpredictability, political populism, and societal polarisation - are considered a risk to attracting investment in Latvia by the largest number of foreign investors (48%). This is good news for Latvia because domestic political processes are something Latvian leaders and society can use to shape themselves. Consequently, we are the "forgers of fortune" of our investment environment," comments Guntars Krols, Partner at EY, leading Strategy and Transactions in the Baltic countries.

Foreign investors are the most positive about Lithuania's investment climate improving in the next three years—70% think that Lithuania's attractiveness for foreign capital will improve. 50% of foreign investors are optimistic about Estonia. Meanwhile, only 10% of investors expect the investment climate in Lithuania to worsen, while 20% are pessimistic about Estonia—the same as in Latvia.

The EY European Attractiveness Survey is an extensive annual analysis of foreign investment data across Europe derived from the EY European Investment Monitor database. This statistical analysis is supplemented by investor surveys conducted by EY in collaboration with FT Longitude. In March and April this year, interviews were conducted with 550 international investors and 150 investors in the Baltics.

Source: EY European Attractiveness Survey
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