EY: Fewer investment projects started in Latvia in 2021, but more jobs created

Latvia last year attracted 32 new direct foreign investment projects which is by 25 percent fewer than in 2020, but more new jobs were created in these projects -2,662, according to the latest report EY Attractiveness SurvEY Europe by Ernst & Young (EY).

At the same time, 41 new investment projects were started in Lithuania, down 23 percent from 2020, and nine new projects were launched in Estonia, down from 11 in 2020. The investment projects created 3,374 new jobs in Lithuania and 2,500 new jobs in Estonia.

EY partner in the Baltic states Guntars Krols said that Latvia last year showed a good performance in attraction of foreign investments. However, due to the geopolitical situation in the region, Latvia will see additional challenges in attracting foreign investments in the future. The war in Ukraine creates sensitive environment for investors, making them to re-consider their decisions, but it is a common problem in the whole region and central European countries.

Last year, Latvia ranked fifth in Europe by the number of new jobs per one million residents created by foreign investments, while Estonia ranked fourth and Lithuania ranked sixth. The list was topped by Ireland, Portugal and Serbia.

Latvian Investments and Development Agency (LIAA) director Kaspars Rozkalns said that Latvia's priority in recent years had been attraction of investments with high added value. In 2021, most of 32 projects are related with information and communication technologies (ICT), smart energy, knowledge based bioeconomy, photonics and smart materials and biomedicine.

Even though some investors have slowed down their activities due to geopolitical situation, interest about Latvia has not disappeared, said Rozkalns, adding that several Western-capital companies are willing to move their operations away from Russia and Belarus, and LIAA is working with them.

In respect of the number of new investment projects per one million residents, Latvia ranks tenth in Europe, while Lithuania ranks 11th and Estonia - 24th. The leading countries in this respect were Luxembourg, Ireland and Lichtenstein.

The largest number of investment projects last year was attracted by France (1,222), the UK (993), Germany (841), Spain (361) and Turkey (264).

In 2020 Latvia attracted 43 new direct foreign investment projects, creating 2,583 new jobs.

Information prepared by Anda Ozola, EY Latvija. Contacts: 26602735, anda.ozola@lv.ey.com.