Page 57 - CE Outlook Regions 2023

3.4.4 Energy & power

With the region’s dependence on imported energy – one of the leading
factors of historically high inflation – it’s vital for the Baltic states to
develop domestic energy production and support the transition to green
energy. Renewable energy and green transition are high on the agenda
in all three Baltic states.

3.4.5 Construction

It is the Latvian capital, Riga, which is believed to have the best office
RE development prospects in 2023. Around 10-12 new office buildings
are scheduled to come on stream in Riga in 2023, offering total office
space of around 137,000 sqm. Such a surge in supply will open up real
opportunities for the expansion of both domestic and foreign
companies. In addition, new and well-paid jobs will also give the
housing segment an extra boost. Lithuanian-owned capital entering
the Riga market shows that the city’s potential is untapped.

The data of the Central Statistical Bureau of Latvia (CSB) for the third
quarter of 2022 show that construction output fell by 13.6 %, y/y,
according to calendar adjusted data at constant prices.
A decline was observed in construction of buildings (of 14.2 %),
specialised construction activities (13.3 %) and civil engineering (12.2
%).

3.4.6 Major Sectors
The Latvian Hotel and Restaurant Association estimates that 60% of
hotel bookings were cancelled after the Russian invasion of Ukraine.

3.5 Real economy - Lithuania

3.5.1 Retail
In Lithuania, retail volume fell by 3.5% y/y in October 2022, after a 1.2%
drop in the previous month. This was the fifth straight month of decline
in retail trade, with sales falling at faster rates for food, beverages, and
tobacco (-8.2% vs -5.0% in September) while non-food products
dropped (-2.8% vs 0.2%). Meanwhile, sales growth of automotive fuel in
specialised stores accelerated (2.1% vs 1.6%). On a monthly basis,
retail sales dropped by 1.5% in October, following a 5.5% gain in
September.

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