Decline in Exports and Imports

In the first half of the year, Estonia's exports to Latvia fell by 14%, a significant indicator given Latvia's importance as an export partner for Estonia. The main export articles were electrical equipment, agricultural products, and mineral products, but the export of these products has decreased for various reasons, including reduced demand and logistical problems. At the same time, Estonia's imports from Latvia decreased by 11%, reflecting an overall weakening of trade, with key products such as mechanical machinery and transport equipment playing a crucial role.

Economic Impacts

The overall decline in trade has affected both countries' economies, with exports and imports falling in almost all product groups. This decline is partly due to the decrease in trade between European Union countries, but the reduction in trade with external markets, particularly Russia and other Eastern countries, has also had a significant impact.

The tightening of economic relations between Estonia and Latvia has also been influenced by high energy prices and inflation, which have increased production costs and reduced consumer purchasing power. This, in turn, has lowered demand for products from both countries.

Future Outlook

In the second half of the year, the trade decline is expected to continue if economic conditions do not improve. However, both countries have opportunities to strengthen their economic relations by focusing on innovation and technologies that could help overcome current challenges and find new markets.

Latvian and Estonian companies need to adapt to changing market conditions and find ways to increase mutual cooperation, especially in sectors that are less vulnerable to economic crises, such as green energy and digital technologies.

In conclusion, while 2024 has been difficult for trade between Latvia and Estonia, there is potential for economic relations to strengthen if both countries can adapt and find new opportunities for cooperation in a changing landscape.