AGP Executive Report

Retail Investment: Lidl says its five years in Latvia have brought €420 million in investment, 1,100 jobs and €305 million in taxes. Its 39 stores work with more than 120 local producers, and the company plans further expansion. AirBaltic Restructuring: The airline is consulting on cuts affecting 500–700 jobs, or up to 23% of its workforce, as it reduces its fleet and network and refocuses on Riga. Industrial Output: Latvia’s industrial production rose 0.3% year on year in August, with manufacturing up 7.6%. Food production grew 8.9% and fabricated metal products 12.3%, while electricity and gas output fell sharply. Manufacturing Growth: Latvian chemical producer Politech is targeting further European growth for its 4Automotive brand, which offers more than 50 products and is backed by in-house production and R&D. Forestry Expansion: Luminor has provided Sigulda-based LIVO Mežs €1.8 million to expand logging, timber storage and export operations.

AirBaltic Restructuring: Latvia’s airline airBaltic has started a formal collective-redundancy process that could cut 500–700 jobs across Riga, Tallinn and Vilnius as it shrinks its Airbus A220 fleet and refocuses its network. Industrial Pulse: Latvia’s industrial production edged up in August, rising 0.3% year-on-year, with manufacturing up 7.6% and mining up 36.1%, while utilities fell 44.6%. Defence Innovation Funding: The EU Parliament backed the €115m AGILE programme to speed defence tech grants for SMEs, start-ups and scale-ups, with fast-track support and testing/certification access. Recycling & Textiles: Latvia, Estonia and Finland are piloting new ways to collect and sort textile, plastic and e-waste under the €2.64m SustainaCycle project, including mobile collection points in Vidzeme. Energy & Heating: Riga’s RNP plans to start the heating season next week, switching on gradually over three days with no cut-offs due to debts for its managed buildings. Security Tech in Riga: Techritory 2026 in Riga (Oct 21–22) will focus on Europe’s digital security and sovereignty, drawing 600+ speakers. Finance Cyber Alert: South Korea’s regulators flagged suspected AI-assisted cyberattacks at multiple financial firms and launched a monthlong fraud-prevention response, with Latvia among the IP locations flagged.

Government Formation & Security: President Edgars Rinkēvičs said incumbent PM Andris Kulbergs should form Latvia’s new government, with visible progress expected by early November, as the election outcome is framed around strengthening the economy and security. U.S.-Baltic Defense Ties: Saeima speaker Daiga Mierina thanked U.S. Congress for Baltic support, highlighting hybrid threats, illegal migration pressure at the Latvian-Belarus border, and Latvia’s commitment to at least 5% of GDP for defense. Airline Restructuring: airBaltic plans layoffs affecting about 500–700 jobs across Riga, Vilnius and Tallinn as it works through Chapter 11 restructuring and union talks. Circular Economy & Textiles: Latvia, Estonia and Finland are testing SustainaCycle (€2.64m) with mobile waste collection in Latvia and textile sorting pilots in Estonia and Finland, targeting 40 tonnes annually and 60% directed to reuse or recycling. Energy & Heating: Rīgas namu pārvaldnieks will start central heating next week, with gradual switching over three days and no cut-offs due to debts for its managed buildings. Finance Cyber Risk: Latvia appears among 33 IP addresses flagged by South Korea’s financial regulators in suspected AI-assisted attacks on brokerages, insurers and card issuers, prompting internal security reviews. Industry & Trade: Luminor approved EUR 1.8m financing for LIVO Mežs to expand logging capacity, logistics and exports, while eurozone retail sales edged up 0.1% month-on-month, with Latvia down 1.4%. Shipping Security: Two commercial vessels were hit by drones in the Black Sea off Bulgaria, triggering a major search-and-rescue and raising concerns for NATO maritime safety.

Latvian Politics & Security: Andris Kulbergs’ United List is on track for Latvia’s biggest Saeima win since 1991, taking about 35.3% and 41 seats, with turnout at 51.8%—a result framed as continuity on hard-line security and support for Ukraine. EU Budget Fight: Seventeen EU states, including Latvia, Italy and Romania, are pushing back against cuts to cohesion and farm funding ahead of the 15–16 October budget talks. Fintech & Investment: UN:BLOCK Fintech heads to Riga on 15 October, spotlighting MiCA rules, cross-border payments, and how to mobilise Latvia’s roughly €9bn in dormant savings and pension capital. Industry & Manufacturing: Riga-based Millmax is pitching itself as a full-cycle contract manufacturer for cosmetics and supplements, with R&D and production under one roof. Energy & Power: Latvia tops EU renewable electricity shares at 97.7% (hydro and solar leading), according to Eurostat figures. Business Links Abroad: LIAA signed a three-year cooperation with Sherbrooke’s quantum ecosystem in Canada, targeting commercialisation and exports in deep tech and smart manufacturing. Transport Works: A night closure of the Lielupe bridge on the Liepāja highway will run 7:50pm–5:50am, with detours via Jelgava routes.

Contract Manufacturing Spotlight: Riga-based Millmax is pitching itself as a one-stop contract manufacturer for cosmetics and dietary supplements, with in-house R&D and production on Kengaraga street—aimed at brands needing dependable volumes across EU markets. Hybrid Threats & Security: Belgium is moving to set up an integrated platform for hybrid threats after convening its National Security Council, as Russia-linked sabotage and airspace violations keep escalating across Europe. Fintech in Riga: UN:BLOCK Fintech will bring 600+ professionals to Riga on Oct 15, focusing on MiCA licensing, cross-border payments, and how to unlock Latvia’s “dormant” €9bn in savings and pensions. Latvian Business Restructuring: Amber Latvijas balzams is under creditor protection after a large tax debt, cutting costs by shifting some production to Lithuania and preparing a legal protection plan. Infrastructure & Transport: Latvia’s State Roads will close the Lielupe bridge on the Liepāja highway overnight Oct 5–6 for repairs and resurfacing. EU Budget Fight: 17 EU states, including Latvia, are urging the Irish presidency to protect cohesion and farm funding in the 2028–2034 budget. Energy & Industry Context: Latvia’s election results and the pro-Ukraine course are set to shape policy as security pressures rise.

Latvian Politics & Security: Andris Kulbergs’ United List is on track for a record election win, positioning him to form a pro-Ukraine coalition as Russia-linked threats stay high. EU Budget for Industry & Farming: Seventeen EU leaders, including Latvia, urged Ireland’s EU presidency to protect the Common Agricultural Policy and Cohesion Policy from cuts in the 2028–2034 budget talks. Defense & Tech Cooperation: Germany and Ukraine signed a $1.5bn deal to scale drone production and bolster Ukraine’s energy resilience amid intensifying strikes. Baltic Business & Investment: Latvia’s investment agency says it reached nearly 90% of its 2026 investment-attraction target in nine months, spanning energy, logistics, defense/dual-use and fintech. Aviation Fuel Supply Chain: NorSAF and Nova Pangaea Technologies plan an ethanol plant in Latvia using wood waste to feed the Baltic’s largest sustainable aviation fuel facility. Agriculture Markets: EU wheat prices rose as export sentiment improved, though Black Sea disruptions keep markets jittery. Culture & Media: Latvia won the Astana AI Film Festival’s $450,000 grand prize, highlighting growing regional creative-tech momentum.

Latvian Politics: Andris Kulbergs’ United List is poised for a major win in Latvia’s Saeima election, with 35.3–35.6% of votes reported and a path to a pro-Ukraine coalition as security fears from Russia shape the campaign. EU Budget Fight: Seventeen EU leaders, including Latvia, urged Ireland’s EU presidency to protect farm and regional funding, warning cuts to the CAP and Cohesion Policy would weaken the bloc. Baltic Security & Defence Industry: NATO tested a new air-defence framework over Lithuania and Latvia, bringing in a U.S. B-1B Lancer for integrated air and missile defence drills. Energy & Transport Shockwaves: Russia’s strikes on Kyiv bridges are disrupting major daily transit flows, highlighting how infrastructure targeting can ripple into logistics and energy stability across the region. Creative Industries: A Latvia-linked co-production, “Minotaur,” is in the 2027 Oscar race for Best International Feature Film, underscoring cross-border film production ties. Investment Climate: Latvia’s investment agency says it reached nearly 90% of its 2026 investment attraction target in nine months, spanning energy, defence/dual-use, logistics and fintech.

Latvia Election & Security: Latvia voted for a new Saeima as drone incidents and Russia-linked threats shaped the campaign; Prime Minister Andris Kulbergs’ United List led in an exit poll with 35.6%, potentially giving him a strong base for coalition talks. EU Farm & Cohesion Funding: Seventeen EU leaders, including Latvia, urged the Irish EU presidency to protect agriculture and cohesion funding in the 2028–2034 budget, warning cuts would weaken the EU and undermine public support. Latvian Investment Push: LIAA reported it reached nearly 90% of its 2026 investment attraction target (€886.8m) in nine months, spanning energy, defence/dual-use, fintech, and logistics. SAF Supply Chain in Latvia: NorSAF will partner with Nova Pangaea Technologies to build an ethanol plant using locally sourced wood waste to feed Latvia’s sustainable aviation fuel plans. Energy & Markets Watch: EU wheat prices rose on hopes for export demand, while eurozone inflation hit 3.8% in September, with energy driving the increase.

Latvian Investment Push: Latvia’s Investment and Development Agency (LIAA) says it has reached nearly 90% of its 2026 investment attraction target in nine months, with €886.8m in secured project value spanning energy, defence/dual-use, fintech, logistics and real estate. SAF & Biofuels Industry: NorSAF will partner with Nova Pangaea Technologies to build an ethanol plant in Latvia using locally sourced wood waste to feed sustainable aviation fuel production. EU Budget Fight for Farmers & Regions: Seventeen EU countries, including Latvia, signed a letter urging the bloc to protect cohesion policy and the Common Agricultural Policy from cuts in the 2028–2034 budget talks. Eurozone Cost Pressure: Eurostat reports eurozone inflation jumped to 3.8% in September, driven mainly by energy, while Latvia’s rate is cited at 2.9%. Security & Industry Context: NATO tested a new air defence framework over Lithuania and Latvia with integrated air and missile defence drills, including a US B-1B bomber—highlighting the region’s defence-linked industrial priorities.

Aviation Biofuels Push: NorSAF and Nova Pangaea Technologies plan an ethanol plant in Latvia using locally sourced wood waste to feed sustainable aviation fuel (SAF) targets. Rail Baltica Cost Control: Latvia’s government set a maximum Rail Baltica cost ceiling of €20m per kilometre for the main line, after earlier figures reportedly ran €28–32m/km. Eurozone Inflation Watch: Eurostat put eurozone inflation at 3.8% in September, driven mainly by energy (+18.8% y/y), with Latvia at 2.9%—a sign of uneven pressure across the bloc. Defence Industry & Drones: Czech forces showcased drone and anti-drone tech at Drone Shield 2026, with NATO observers including Latvia. Baltic Security Drills: UK Royal Marines trained in the Faroe Islands, rehearsing action around the Greenland–Iceland–UK gap and protection of undersea cables. EU Energy Cross-Border Renewables: Three new projects (including Ukraine wind and an Austria–Germany geothermal heat network) gained CB RES status, unlocking EU support for studies and works. airBaltic Milestone: airBaltic marked 31 years since its first Riga–Stockholm flight, now serving 70+ destinations.

Latvia’s Defence & Industry: Latvia is set to receive the first IRIS-T medium-range air defence systems later this year, with operational combat duty possible in the first half of next year, while work continues on integrating BLAZE interceptor drones near the eastern border. Counter-drone Deal: Anduril and Latvian startup ORIGIN will fuse ORIGIN’s BLAZE interceptor with Anduril’s Lattice AI command-and-control to build layered drone defence for NATO’s eastern flank. Artillery Procurement: Latvia signed a three-way contract for Czech-made Morana 155mm wheeled howitzers and rocket artillery, using EU SAFE loans and a plan to shift part of production to Latvia. EU Policy & Compliance: The European Commission opened a consumer credit infringement case, giving Spain two months to transpose new EU rules or face court and penalties; it also published key infringement decisions across policy areas. Public Media Language: Latvia restricted public media Russian broadcasting from Jan 1 to exceptional cases, with potential staffing impacts. Business & Innovation: Riga Nordic University launched an international journal on interdisciplinary applied sciences, and Riga-based Trace.Space unveiled Trinity, a platform to help hardware teams scale from prototypes to production. Security & Politics: Latvia detained two citizens suspected of spying for Russia’s GRU, and election campaigning is increasingly shaped by security concerns.

Defense & Security Procurement: Latvia could start using IRIS-T medium-range air defence in operational combat duty in the first half of 2027, with initial acceptance work beginning later this year, while work continues on integrating drone interceptors like ORIGIN’s BLAZE with Anduril’s Lattice AI command-and-control for layered counter-drone defence. Parliament & Media Policy: The Saeima has restricted public media Russian-language broadcasting from Jan 1 to exceptional cases only, with disinformation rebuttals as a narrow exception. Cybersecurity & Risk Management: CERT.LV data shows Latvia’s cyber threat environment stayed under “red alert” over summer, with a notable share of attacks causing significant business and state impacts, and experts warn cybersecurity must be treated as organisational risk, not just an IT issue. Industrial Tech & Startups: Riga-based Trace.Space launched Trinity, aiming to connect engineering requirements, testing and variants so hardware teams can scale from prototypes to production. Local Business & Consumer Impact: Amber Latvijas Balzams remains in the red in H1 2026 as volumes and revenue fall sharply amid weaker purchasing power and excise pressures. International Trade & Growth: Latvia’s MFA and EU partners promoted Global Gateway and EU Tech Business Offer tools to help Latvian firms find partners and expand exports. Food & Supply Controls: Latvia moved to tighten checks on Russian and Belarusian food and grain flows, including broader Russian food bans.

Defence Procurement & Industry: Latvia is moving closer to long-range strike capability, with reports that it plans to buy Anduril’s Barracuda cruise missiles and, separately, signs to acquire the Czech-Slovak “Morana” 155mm artillery system under a trilateral deal that also targets gradual localization in Latvia. Security & Hybrid Threats: President Edgars Rinkēvičs said Latvia has no indication Russia will directly invade NATO members, but warned of ongoing provocations and cyberattacks; Estonia meanwhile attributed an arson attack on Milrem Robotics to Russian special services, underscoring the risk to defence supply chains. International Cooperation & Public Diplomacy: Latvia’s International Image Policy Coordination Council resumed work to build a unified national image strategy for 2027–2031, including preparations for Latvia’s EU Council Presidency in 2028. Energy & Costs: Saeima is set to approve a fuel cost cut by suspending a safety reserve service fee through end-2026, aiming to lower prices for drivers and logistics, agriculture and manufacturing. Business Support: LIAA’s autumn 2026 Business Incubation Programme hit a record 313 applications, signaling strong demand for export- and innovation-focused growth help. Infrastructure & Services: Riga Airport advanced its €98m terminal expansion, while district heating and water metering rules from 2027 are pushing operators toward remote-read systems.

Latvia Security Outlook: President Edgars Rinkēvičs says Latvia currently has no signs of a direct Russian invasion of NATO states, but warns of ongoing Russian provocations and cyberattacks, urging the public to report suspicious activity. Baltic Defence Industry Under Fire: Estonia attributes the August arson at Milrem Robotics in Tallinn to Russian special services, summoning Russia’s chargé d’affaires; Latvia’s authorities had detained suspects and handed them over. Fuel Costs Relief: Latvia’s Saeima is set to approve a temporary suspension of a fuel safety reserve service fee, aimed at lowering prices for drivers and cutting costs for transport, logistics, agriculture and manufacturing. Trade & Supply Chain Pressure: Latvian transit checks tighten as grain shipments from Russia and Belarus rise; customs and the Food and Veterinary Service are testing cargo for grain stolen from Ukraine. Business Support Record: LIAA’s Business Incubation Programme hit a new high with 313 applications for the autumn intake. Culture & Heritage Funding: The Cabinet reallocates €4.35m to complete the Great Guild Hall and Riga’s “Arsenāls” exhibition hall refurbishment.

Defence Procurement: Latvia plans to buy U.S. Anduril Barracuda long-range cruise missiles, with President Edgars Rinkēvičs announcing the move after a visit to Anduril in the US; details on versions, quantities and timing are still unclear. Baltic Security & Industry: Estonia says Russia ordered an arson attack on Milrem Robotics in Tallinn, part of a wider sabotage campaign; Estonia detained Latvian suspects and summoned Russia’s chargé d’affaires, while NATO and EU leaders backed Tallinn. Trade & High-Tech Cooperation: Latvia’s LIAA US trade mission wrapped up with 44 companies and partners signing defence-technology and genomics agreements, aiming at joint development, testing, manufacturing and precision-medicine projects. Agri-Food Supply Chains: Latvia is tightening checks on grain transit after reports of rapidly growing Russian and Belarusian shipments; customs and food authorities are sampling cargo to test for grain stolen from Ukraine. Business & Logistics: Venipak invested over €2.5m in Baltic infrastructure and expanded parcel locker capacity in Latvia by 15%. Agri-Food Results: Agrova Baltics reported strong H1 2026 growth, with revenue up 51.7% to €15.2m and profit rising to €3.95m, driven by capacity utilisation and cage-free expansion. Retail Demand: Latvia’s retail trade turnover rose in August, with mail/internet sales and pharma leading growth.

Baltic Security: Estonia says Russia ordered an August arson attack on Milrem Robotics, a drone-maker supplying Ukraine, and EU/NATO leaders rallied behind Tallinn after suspects were detained and Moscow rejected the claims. Food & Trade Security: Latvia, alongside Lithuania and Estonia, is tightening checks to stop Russian-stolen Ukrainian grain entering markets, including lab testing of samples and a push for a regional verification scheme. Agri-Food Business: Agrova Baltics reported a 52% revenue jump in H1 2026 to EUR 15.2m and profit of EUR 3.95m, driven by higher egg volumes and ongoing capacity expansion toward more cage-free production. Riga Finance & Offices: Nordic Investment Bank signed a long-term lease at Origo One, reinforcing Riga’s Central Business District as a growing Baltic finance hub. Fuel Costs Policy: Latvia’s Saeima advanced amendments that could temporarily suspend a fuel security reserve fee, aiming to cut pump prices, while other tax relief ideas stalled.