Latvia Economy Profile 2009

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. 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. The current account deficit and inflation remain major concerns.

GDP (purchasing power parity)

$38.86 billion (2008 est.)
$40.74 billion (2007 est.)
$37.03 billion (2006 est.)
note: data are in 2008 US dollars

GDP (official exchange rate)

$34.05 billion (2008 est.)

GDP - real growth rate

-4.6% (2008 est.)
10% (2007 est.)
12.2% (2006 est.)

GDP - per capita (PPP)

$17,300 (2008 est.)
$18,000 (2007 est.)
$16,300 (2006 est.)
note: data are in 2008 US dollars

GDP - composition by sector

agriculture: 3.1%
industry: 22.7%
services: 74.2% (2008 est.)

Population below poverty line

NA%

Labor force

1.193 million (2008 est.)

Labor force - by occupation

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

Unemployment rate

5.3% (2008 est.)
5.7% (2007 est.)

Household income or consumption by percentage share

lowest 10%: 2.7%
highest 10%: 27.4% (2004)

Distribution of family income - Gini index

36 (2005)
32 (1999)

Investment (gross fixed)

30.2% of GDP (2008 est.)

Budget

revenues: $12.06 billion
expenditures: $13.41 billion (2008 est.)

Public debt

19.5% of GDP (2008 est.)
11.8% of GDP (2004 est.)

Inflation rate (consumer prices)

15.4% (2008 est.)
10.1% (2007 est.)

Central bank discount rate

6% (31 December 2008)
6% (31 December 2007)

Commercial bank prime lending rate

16.8% (31 December 2008)

Stock of money

$6.688 billion (31 December 2008)
$8.196 billion (31 December 2007)

Stock of quasi money

$5.572 billion (31 December 2008)
$5.113 billion (31 December 2007)

Stock of domestic credit

$30.49 billion (31 December 2008)
$27.56 billion (31 December 2007)

Industries

buses, vans, street and railroad cars; synthetic fibers, agricultural machinery, fertilizers, washing machines, radios, electronics, pharmaceuticals, processed foods, textiles; note - dependent on imports for energy and raw materials

Industrial production growth rate

-4.5% (2008 est.)

Electricity - production

4.734 billion kWh (2006 est.)

Electricity - production by source

fossil fuel: 29.1%
hydro: 70.9%
nuclear: 0%
other: 0% (2001)

Electricity - consumption

6.424 billion kWh (2006 est.)

Electricity - exports

1.676 billion kWh (2007 est.)

Electricity - imports

4.671 billion kWh (2007 est.)

Oil - production

0 bbl/day (2007 est.)

Oil - consumption

35,180 bbl/day (2006 est.)

Oil - imports

45,340 bbl/day (2005)

Oil - exports

10,070 bbl/day (2005)

Oil - proved reserves

0 bbl (1 January 2006 est.)

Natural gas - production

0 cu m (2007 est.)

Natural gas - consumption

2.04 billion cu m (2007 est.)

Natural gas - exports

0 cu m (2007 est.)

Natural gas - imports

2.04 billion cu m (2007 est.)

Current Account Balance

-$4.354 billion (2008 est.)
-$6.485 billion (2007 est.)

Agriculture - products

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

Exports

$9.559 billion (2008 est.)
$8.227 billion (2007 est.)

Exports - commodities

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

Exports - partners

Lithuania 15.5%, Russia 14.8%, Estonia 13.1%, Germany 7.7%, Sweden 6.2%, Denmark 4.3% (2008)

Imports

$15.34 billion (2008 est.)
$15.13 billion (2007 est.)

Imports - commodities

machinery and equipment, chemicals, fuels, vehicles

Imports - partners

Lithuania 16.1%, Germany 12.9%, Russia 10.7%, Poland 7%, Estonia 7%, Sweden 4.4%, Finland 4.3% (2008)

Reserves of foreign exchange and gold

$5.248 billion (31 December 2008 est.)
$5.758 billion (31 December 2007 est.)

Debt - external

$42.05 billion (31 December 2008)
$38.95 billion (31 December 2007)

Stock of direct foreign investment - at home

$11.21 billion (31 December 2008 est.)
$9.779 billion (31 December 2007 est.)

Stock of direct foreign investment - abroad

$1.013 billion (31 December 2008 est.)
$782 million (31 December 2007 est.)

Market value of publicly traded shares

$1.609 billion (31 December 2008)
$3.111 billion (31 December 2007)
$2.705 billion (31 December 2006)

Economic aid - recipient

$162 million (2004)

Currency (code)

lat (LVL)

Currency (code)

LVL

Exchange rates

lati (LVL) per US dollar - 0.4701 (2008 est.), 0.5162 (2007), 0.5597 (2006), 0.5647 (2005), 0.5402 (2004)

Fiscal year

calendar year