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Latvia Economy Profile 2017

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Economy - overviewLatvia is a small, open economy with exports contributing more than half of GDP. Due to its geographical location, transit services are highly-developed, along with timber and wood-processing, agriculture and food products, and manufacturing of machinery and electronics industries. Corruption continues to be an impediment to attracting foreign direct investment and Latvia's low birth rate and decreasing population are major challenges to its long-term economic vitality.

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 slowing world economy. Triggered by the collapse of the second largest bank, GDP plunged 18% in 2009. The economy has yet to return to pre-crisis levels in real terms despite strong growth, especially in the export sector. Continued gains in competitiveness and investment will be key to maintaining economic growth, especially in light of unfavorable demographic trends.

The IMF, EU, and other international donors provided substantial financial assistance to Latvia as part of an agreement to defend the currency's peg to the euro in exchange for the government's commitment to stringent austerity measures. The IMF/EU program successfully concluded in December 2011, although, the austerity measures have imposed large social costs. The majority of companies, banks, and real estate have been privatized, although the state still holds sizable stakes in a few large enterprises, including 80% ownership of the Latvian national airline. Latvia officially joined the World Trade Organization in February 1999 and the EU in May 2004. Latvia also joined the euro zone in 2014 and the OECD in 2016.
GDP (purchasing power parity)$50.65 billion (2016 est.)
$49.61 billion (2015 est.)
$48.29 billion (2014 est.)
note: data are in 2016 dollars
GDP (official exchange rate)$25.02 billion (2016 est.)
GDP - real growth rate2.1% (2016 est.)
2.7% (2015 est.)
2% (2014 est.)
GDP - per capita (PPP)$25,700 (2016 est.)
$25,000 (2015 est.)
$24,100 (2014 est.)
note: data are in 2016 dollars
Gross national saving19.6% of GDP (2016 est.)
20.7% of GDP (2015 est.)
21.5% of GDP (2014 est.)
GDP - composition, by end usehousehold consumption: 62%
government consumption: 17.5%
investment in fixed capital: 18.3%
investment in inventories: 1.6%
exports of goods and services: 58%
imports of goods and services: -57.4% (2016 est.)
GDP - composition by sectoragriculture: 4.8%
industry: 24.4%
services: 70.8% (2016 est.)
Population below poverty line25.5% (2015)
Labor force957,100 (2016 est.)
Labor force - by occupationagriculture: 7.7%
industry: 24.1%
services: 68.1% (2016 est.)
Unemployment rate9.6% (2016 est.)
9.9% (2015 est.)
Unemployment, youth ages 15-24total: 19.6%
male: 19.4%
female: 20% (2014 est.)
Household income or consumption by percentage sharelowest 10%: 2.2%
highest 10%: 26.3% (2015)
Distribution of family income - Gini index34.5 (2015)
35.4 (2014)
Budgetrevenues: $9.766 billion
expenditures: $10.11 billion (2016 est.)
Taxes and other revenues34.9% of GDP (2016 est.)
Budget surplus (+) or deficit (-)-1.2% of GDP (2016 est.)
Public debt38.7% of GDP (2016 est.)
36.4% of GDP (2015 est.)
note: data cover general government debt, and includes debt instruments issued (or owned) by government entities, including sub-sectors of central government, state government, local government, and social security funds
Inflation rate (consumer prices)0.1% (2016 est.)
0.2% (2015 est.)
Central bank discount rate0% (31 December 2016 est.)
0.05% (31 December 2015 est.)
Commercial bank prime lending rate4.5% (31 December 2016 est.)
4.5% (31 December 2015 est.)
Stock of narrow money$11.66 billion (31 December 2016 est.)
$10.3 billion (31 December 2015 est.)
Stock of broad money$13.76 billion (31 December 2016 est.)
$12.53 billion (31 December 2015 est.)
Stock of domestic credit$16.03 billion (31 December 2016 est.)
$15.39 billion (31 December 2015 est.)
Market value of publicly traded shares$6.76 billion (31 December 2016 est.)
$6.799 billion (31 December 2015 est.)
$7.127 billion (31 December 2014 est.)
Agriculture - productsgrain, rapeseed, potatoes, vegetables; pork, poultry, milk, eggs; fish
Industriesprocessed foods, processed wood products, textiles, processed metals, pharmaceuticals, railroad cars, synthetic fibers, electronics
Industrial production growth rate4.9% (2016 est.)
Current Account Balance$409 million (2016 est.)
-$210 million (2015 est.)
Exports$11.22 billion (2016 est.)
$11.4 billion (2015 est.)
Exports - commoditiesfoodstuffs, wood and wood products, metals, machinery and equipment, textiles
Exports - partnersLithuania 17.8%, Russia 11.4%, Estonia 11.1%, Germany 6.3%, Poland 5.6%, Sweden 5.1%, UK 5%, Denmark 4% (2015)
Imports$13.6 billion (2016 est.)
$13.74 billion (2015 est.)
Imports - commoditiesmachinery and equipment, consumer goods, chemicals, fuels, vehicles
Imports - partnersLithuania 16.9%, Germany 11.3%, Poland 10.5%, Russia 8.2%, Estonia 7.8%, Finland 5.2%, Netherlands 4% (2015)
Reserves of foreign exchange and gold$7.507 billion (31 December 2014 est.)
$7.893 billion (31 December 2013 est.)
Debt - external$40.02 billion (31 March 2016 est.)
$38.19 billion (31 March 2015 est.)
Stock of direct foreign investment - at home$16.41 billion (31 December 2016 est.)
$15.71 billion (31 December 2015 est.)
Stock of direct foreign investment - abroad$2.651 billion (31 December 2016 est.)
$2.391 billion (31 December 2015 est.)
Exchange rateslati (LVL) per US dollar -
0.9129 (2016 est.)
0.9012 (2015 est.)
0.9012 (2014 est.)
0.7525 (2013 est.)
0.55 (2012 est.)
Fiscal yearcalendar year

Source: CIA World Factbook
This page was last updated on July 9, 2017

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