Latvia Defense Market Size and Trends, Budget Allocation, Regulations, Key Acquisitions, Competitive Landscape and Forecast, 2022-2027

Pages: 70 Published: October 11, 2022 Report Code: GDDF0793MR

In 2022, the government of Latvia allocated $0.90 billion to its total defense budget. The country’s defense budget is expected to grow at a CAGR of more than 2% during 2023-2027. Despite a slight drop in 2023 due to the conclusion of some ongoing acquisitions, this follows a general trend for increased expenditure over the historic period, with more substantial growth picking up pace in 2020, when the last defense strategy document was released by the Latvian government.

The Latvia defense market research report offers a detailed analysis of the Latvia defense market with market size forecasts covering the next five years. This report also details defense budget assessment, market entry strategy and regulations, emerging opportunities, defense platform acquisitions, fleet size, and challenges in the Latvian defense market.

Latvia Defense Market Overview

Latvia Defense Market Overview

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Latvia Defense Market Drivers

Latvia’s defense expenditure is driven by its unique geopolitical circumstances as an ex-Soviet state bordering the Russian Federation. Along with the other Baltic states—Lithuania and Estonia—Latvia has brought itself into the Western sphere of influence through membership of the EU and NATO, creating tensions with Russia. The invasion of Georgia in 2008, annexation of Crimea in 2014, and invasion of the rest of Ukraine in 2022 have worsened this situation and driven an increase in defense spending in Latvia. A large presence of NATO personnel in the country also increases expenditure on the requisite facilities.

The war in Ukraine has increased tensions between Latvia and Russia, as the two countries share a border and turbulent history. Latvia aims to upgrade its fleet of armored vehicles, improve its firepower with new artillery systems and anti-tank missiles, and enact personnel reforms. Despite its small military and expenditure, Latvia regularly contributes to multilateral deployments through its allies and partners.

Military Doctrine and Defense Strategies in Latvia

The operational concept of Latvia’s armed forces is focused on preparing a well-drilled infantry force to defend its own territory and that of the wider Baltic region, with the presumption that it shall be supported and reinforced by NATO states under collective defense. In real terms, Latvia’s defense budget remains small, neither having been or forecast to be above $1 billion in total. The air force consists of only a handful of helicopters and the navy just a few scarcely armed patrol boats and minesweepers. For this reason, Latvia and the Baltics rely on NATO troops for air cover and ‘heavier’ platforms such as MBTs and major surface combatants. Latvian defense is highly integrated with its Baltic and Central European neighbors, including a corps-level NATO command that coordinates defense across all three Baltic states headquartered in Poland. ​

​Latvia’s defense and security policy is largely defined by its ‘defense concept’ documents, published every four to five years. The most recent was in 2020 and outlines Latvia’s priorities and threat perceptions. It highlights the challenges to the liberal world order presented by a resurgent Russia and increasingly powerful China, threatening a balance of power that Latvia has depended upon to secure its independence and prosperity in the post-Cold War world. It highlights the belief that Russia seeks to undermine stability and justify aggression against Latvia and has increasingly employed ‘hybrid’ tactics—including direct cyberattacks—to alter the geopolitical situation in Europe. ​

Latvia Defense Market Segmentation by Sectors

Military fixed-wing aircraft, military land vehicles, military UAV, INS GNSS, EOIR systems, military rotorcraft, missiles and missile defense systems, artillery, electronic warfare systems, military radar, tactical communications, and body armor and personal protection are the key sectors in the market. Military land vehicles will be the leading sector in Latvia defense market.

Latvia Defense Market Analysis, by Sectors

Latvia Defense Market Analysis, by Sectors

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Competitive Landscape

Some of the leading companies in the Latvia defense market are Patria Oyj​, Sikorsky Aircraft Corp​, Aeronvironment Inc​. Sikorsky has a strong presence in the helicopter market. Sikorsky manufactures both military and commercial helicopters. It manufactures a broad range of military aircraft, including the BLACK HAWK helicopter, Sikorsky MH-60R SEAHAWK helicopter, SUPERHAWK helicopter, CH-53K helicopter, and S-97 RAIDER.

Latvia Defense Market Report Overview

Market Size (2022) $0.90 Billion
CAGR (2023-2027) >2%
Key Sectors Military Land Vehicles, Military UAV, INS GNSS, EOIR Systems, Military Rotorcraft, Artillery, Electronic Warfare Systems, Military Radar, Tactical Communications, Body Armor And Personal Protection, Missiles And Missile Defense Systems, Military Fixed-Wing Aircraft
Leading Companies Patria Oyj​, Sikorsky Aircraft Corp​, Aeronvironment Inc


  • Key sections include, political alliances and political threat perceptions as well as detailing market attractiveness and emerging opportunities.
  • In particular this report identifies budgetary trends over the next 5 years to 2027, outlining predicted expenditure as well as expected costs.
  • This report of part of our network of country research reports.

Reasons to Buy

  • Determine potential investment opportunities based on analysis and market projections.
  • Gain an understanding of the Latvian defense market and potential limitations to involvement.
  • Understanding of how spending will change in the next 5 years and the impact of COVID-19.

Key Players

Patria Oy
AeroVironment Inc

Table of Contents

Table of Contents

Executive Summary

Defense Budget Assessment

Budgeting Process

Defense Market Size Historic And Forecast

Drivers Of Defense Expenditure

Analysis Of Defense Budget Allocation

Military Doctrine And Security Environment

Military Doctrine And Strategy

Political And Strategic Alliances

Market Entry Strategy And Regulations

Defense Procurement Bodies

Funding Opportunities

Trade Associations and Defense Clusters

Types of Contracts and Opportunities

Types of Procurement Procedure

Procurement Policy and Market Regulations

Market Entry Routes

Key Challenges

Major Deals and M&A

Market Attractiveness And Emerging Opportunities

Market Attractiveness, 2022-27

Top Defense Segments By Value

Import And Export Market Dynamics

Import Market Dynamics

Export Market Dynamics

Defense Platform Acquisitions

Defense Platform Acquisitions By Value

Common Armored Vehicle System

Armored Engineering Vehicle/ Tactical Trucks

M109A5 155mm

UH-60M Black Hawk

RQ-20A Puma

Fleet Size

Competitive Landscape

Defense Companies Operating In Latvia

Main Defense Companies


About This Report

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Frequently Asked Questions

The defense budget of Latvia is $0.90 billion in 2022.

The defense market in Latvia is expected to achieve a CAGR of more than 2% during 2023-27.

Military fixed-wing aircraft, military land vehicles, military UAV, INS GNSS, EOIR systems, military rotorcraft, missiles and missile defense systems, artillery, electronic warfare systems, military radar, tactical communications, and body armor and personal protection are the key sectors in the Latvia defense market.

Some of the leading companies in the Latvia defense market are Patria Oyj​, Sikorsky Aircraft Corp​, Aeronvironment Inc​.


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