Latvia: Economy Overview

Latvia's economy experienced GDP growth of more than 10% per year during 2006-07 but entered a severe recession in 2008 as a result of an unsustainable current account deficit and large debt exposure amid the softening world economy.

Economy Overview

GDP plunged nearly 18% in 2009 - the three former Soviet Baltic republics had the world's worst declines last year. The IMF, EU, and other donors provided assistance to Latvia as part of an agreement to defend the currency's peg to the euro and reduce the fiscal deficit to about 5% of GDP. The majority of companies, banks, and real estate have been privatized, although the state still holds sizable stakes in a few large enterprises. Latvia officially joined the World Trade Organization in February 1999. EU membership, a top foreign policy goal, came in May 2004.

GDP (purchasing power parity):

$32.31 billion (2009 est.)
country comparison to the world: 104
$39.4 billion (2008 est.)
$41.13 billion (2007 est.)
note: data are in 2009 US dollars

GDP (official exchange rate):

$25.93 billion (2009 est.)

GDP - real growth rate:

-18% (2009 est.)
country comparison to the world: 215
-4.2% (2008 est.)
10% (2007 est.)

GDP - per capita (PPP):

$14,500 (2009 est.)
country comparison to the world: 77
$17,500 (2008 est.)
$18,200 (2007 est.)
note: data are in 2009 US dollars

GDP - composition by sector:

agriculture: 3.8%
industry: 21.9%
services: 74.3% (2009 est.)

Labor force:

1.186 million (2009 est.)
country comparison to the world: 136

Labor force - by occupation:

agriculture: 12.1%
industry: 25.8%
services: 61.8% (2005 est.)

Unemployment rate:

17.1% (2009 est.)
country comparison to the world: 161
7.5% (2008 est.)

Investment (gross fixed):

21.5% of GDP (2009 est.)
country comparison to the world: 75

Budget:

revenues: $8.901 billion
expenditures: $11.24 billion (2009 est.)

Inflation rate (consumer prices):

3.5% (2009 est.)
country comparison to the world: 118
15.4% (2008 est.)

Commercial bank prime lending rate:

16.23% (31 December 2009 est.)
country comparison to the world: 77
11.85% (31 December 2008 est.)

Stock of domestic credit:

$27.76 billion (31 December 2009 est.)
country comparison to the world: 68
$29.62 billion (31 December 2008 est.)

Agriculture - products:

grain, sugar beets, potatoes, vegetables; beef, pork, milk, eggs; fish

Industries:

buses, vans, street and railroad cars; synthetic fibers, agricultural machinery, fertilizers, washing machines, radios, electronics, pharmaceuticals, processed foods, textiles

Industrial production growth rate:

-22.8% (2009 est.)
country comparison to the world: 164

Oil - production:

0 bbl/day (2009 est.)
country comparison to the world: 157

Natural gas - production:

0 cu m (2008 est.)
country comparison to the world: 168

Current account balance:

$2.53 billion (2009 est.)
country comparison to the world: 34
-$4.493 billion (2008 est.)

Exports:

$7.223 billion (2009 est.)
country comparison to the world: 91
$9.634 billion (2008 est.)

Exports - commodities:

wood and wood products, machinery and equipment, metals, textiles, foodstuffs

Exports - partners:

Lithuania 15.19%, Estonia 13.57%, Russia 13.17%, Germany 8.13%, Sweden 5.7% (2009)

Imports:

$8.906 billion (2009 est.)
country comparison to the world: 91
$15.65 billion (2008 est.)

Imports - commodities:

machinery and equipment, chemicals, fuels, vehicles

Imports - partners:

Lithuania 16.36%, Germany 11.34%, Russia 10.68%, Poland 8.11%, Estonia 7.69% (2009)

Debt - external:

$41.58 billion (31 December 2009 est.)
country comparison to the world: 55
$42.11 billion (31 December 2008 est.)

Stock of direct foreign investment - at home:

$11.61 billion (31 December 2009 est.)
country comparison to the world: 79
$11.54 billion (31 December 2008 est.)

Stock of direct foreign investment - abroad:

$1.037 billion (31 December 2009 est.)
country comparison to the world: 72
$1.054 billion (31 December 2008 est.)

Exchange rates:

Source: CIA - The World Factbook