Latvia's Ministry of Finance has presented a report to the Cabinet of Ministers on capital market development that concludes the current pipeline of state and municipal companies preparing for an initial public offering (IPO) or a strategic investor by 2027 will not, on its own, achieve the government's medium term goal of raising Latvian stock market capitalisation toward the level of the other Baltic states and supporting developed market classification criteria. Air Baltic Corporation, LAU Infra Grupa and Rīgas namu pārvaldnieks are currently assessing those options, and the report combines that pipeline review with additional proposals to deepen the capital market. The proposed measures include participation in European Union initiatives, changes to savings and tax regulation, promotion of savings bonds and other capital market instruments, stronger financing options for companies, and further work on the legal framework for real estate investment trusts, securitisation, the investor representative institution and market infrastructure. The ministry also cites the OECD's 2024 Economic Survey of Latvia, which found the capital market underdeveloped and limiting access to non-bank finance. Drawing on earlier discussions with market participants and social partners, the report identifies a shortage of sufficiently large market-ready companies, a weak start-up ecosystem, limited fundraising options for venture capital funds and low activity by domestic institutional investors as key constraints, alongside calls to strengthen governance of state-owned enterprises, including consideration of a centralised professional model.

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