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Latvia vs. Russia

Economy

LatviaRussia
Economy - overview

Latvia 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 by more than 14% in 2009 and, despite strong growth since 2011, the economy took until 2017 return to pre-crisis levels in real terms. Strong investment and consumption, the latter stoked by rising wages, helped the economy grow by more than 4% in 2017, while inflation rose to 3%. Continued gains in competitiveness and investment will be key to maintaining economic growth, especially in light of unfavorable demographic trends, including the emigration of skilled workers, and one of the highest levels of income inequality in the EU.

In the wake of the 2008-09 crisis, 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 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.

Russia has undergone significant changes since the collapse of the Soviet Union, moving from a centrally planned economy towards a more market-based system. Both economic growth and reform have stalled in recent years, however, and Russia remains a predominantly statist economy with a high concentration of wealth in officials' hands. Economic reforms in the 1990s privatized most industry, with notable exceptions in the energy, transportation, banking, and defense-related sectors. The protection of property rights is still weak, and the state continues to interfere in the free operation of the private sector.

Russia is one of the world's leading producers of oil and natural gas, and is also a top exporter of metals such as steel and primary aluminum. Russia is heavily dependent on the movement of world commodity prices as reliance on commodity exports makes it vulnerable to boom and bust cycles that follow the volatile swings in global prices. The economy, which had averaged 7% growth during the 1998-2008 period as oil prices rose rapidly, has seen diminishing growth rates since then due to the exhaustion of Russia’s commodity-based growth model.

A combination of falling oil prices, international sanctions, and structural limitations pushed Russia into a deep recession in 2015, with GDP falling by close to 2.8%. The downturn continued through 2016, with GDP contracting another 0.2%, but was reversed in 2017 as world demand picked up. Government support for import substitution has increased recently in an effort to diversify the economy away from extractive industries.

GDP (purchasing power parity)
$54.02 billion (2017 est.)
$51.67 billion (2016 est.)
$50.55 billion (2015 est.)

note: data are in 2017 dollars

$4.016 trillion (2017 est.)
$3.955 trillion (2016 est.)
$3.963 trillion (2015 est.)

note: data are in 2017 dollars

GDP - real growth rate
2.08% (2019 est.)
4.2% (2018 est.)
3.23% (2017 est.)
1.34% (2019 est.)
2.54% (2018 est.)
1.83% (2017 est.)
GDP - per capita (PPP)
$27,700 (2017 est.)
$26,200 (2016 est.)
$25,500 (2015 est.)

note: data are in 2017 dollars

$27,900 (2017 est.)
$27,500 (2016 est.)
$27,500 (2015 est.)

note: data are in 2017 dollars

GDP - composition by sector
agriculture: 3.9% (2017 est.)
industry: 22.4% (2017 est.)
services: 73.7% (2017 est.)
agriculture: 4.7% (2017 est.)
industry: 32.4% (2017 est.)
services: 62.3% (2017 est.)
Population below poverty line
25.5% (2015)
13.3% (2015 est.)
Household income or consumption by percentage share
lowest 10%: 2.2%
highest 10%: 26.3% (2015)
lowest 10%: 2.3%
highest 10%: 32.2% (2012 est.)
Inflation rate (consumer prices)
2.9% (2017 est.)
0.1% (2016 est.)
3.7% (2017 est.)
7.1% (2016 est.)
Labor force
885,000 (2020 est.)
69.923 million (2020 est.)
Labor force - by occupation
agriculture: 7.7%
industry: 24.1%
services: 68.1% (2016 est.)
agriculture: 9.4%
industry: 27.6%
services: 63% (2016 est.)
Unemployment rate
6.14% (2019 est.)
6.51% (2018 est.)
4.6% (2019 est.)
4.8% (2018 est.)
Distribution of family income - Gini index
34.5 (2015)
35.4 (2014)
41.2 (2015)
41.9 (2013)
Budget
revenues: 11.39 billion (2017 est.)
expenditures: 11.53 billion (2017 est.)
revenues: 258.6 billion (2017 est.)
expenditures: 281.4 billion (2017 est.)
Industries
processed foods, processed wood products, textiles, processed metals, pharmaceuticals, railroad cars, synthetic fibers, electronics
complete range of mining and extractive industries producing coal, oil, gas, chemicals, and metals; all forms of machine building from rolling mills to high-performance aircraft and space vehicles; defense industries (including radar, missile production, advanced electronic components), shipbuilding; road and rail transportation equipment; communications equipment; agricultural machinery, tractors, and construction equipment; electric power generating and transmitting equipment; medical and scientific instruments; consumer durables, textiles, foodstuffs, handicrafts
Industrial production growth rate
10.6% (2017 est.)
-1% (2017 est.)
Agriculture - products
grain, rapeseed, potatoes, vegetables; pork, poultry, milk, eggs; fish
grain, sugar beets, sunflower seeds, vegetables, fruits; beef, milk
Exports
$12.84 billion (2017 est.)
$11.35 billion (2016 est.)
$353 billion (2017 est.)
$281.9 billion (2016 est.)
Exports - commodities
foodstuffs, wood and wood products, metals, machinery and equipment, textiles
petroleum and petroleum products, natural gas, metals, wood and wood products, chemicals, and a wide variety of civilian and military manufactures
Exports - partners
Lithuania 15.8%, Russia 14%, Estonia 10.9%, Germany 6.9%, Sweden 5.7%, UK 4.9%, Poland 4.3%, Denmark 4.1% (2017)
China 10.9%, Netherlands 10%, Germany 7.1%, Belarus 5.1%, Turkey 4.9% (2017)
Imports
$15.79 billion (2017 est.)
$13.61 billion (2016 est.)
$238 billion (2017 est.)
$191.6 billion (2016 est.)
Imports - commodities
machinery and equipment, consumer goods, chemicals, fuels, vehicles
machinery, vehicles, pharmaceutical products, plastic, semi-finished metal products, meat, fruits and nuts, optical and medical instruments, iron, steel
Imports - partners
Lithuania 17.6%, Germany 11.7%, Poland 8.7%, Estonia 7.6%, Russia 7.1%, Netherlands 4.2%, Finland 4.2%, Italy 4% (2017)
China 21.2%, Germany 10.7%, US 5.6%, Belarus 5%, Italy 4.5%, France 4.2% (2017)
Debt - external
$40.02 billion (31 March 2016 est.)
$38.19 billion (31 March 2015 est.)
$539.6 billion (31 December 2017 est.)
$434.8 billion (31 December 2016 est.)
Exchange rates
euros (EUR) per US dollar -
0.885 (2017 est.)
0.903 (2016 est.)
0.9214 (2015 est.)
0.885 (2014 est.)
0.7634 (2013 est.)
Russian rubles (RUB) per US dollar -
58.39 (2017 est.)
67.056 (2016 est.)
67.056 (2015 est.)
60.938 (2014 est.)
38.378 (2013 est.)
Fiscal year
calendar year
calendar year
Public debt
36.3% of GDP (2017 est.)
37.4% of GDP (2016 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

15.5% of GDP (2017 est.)
16.1% of GDP (2016 est.)

note: data cover general government debt and include debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data include debt issued by subnational entities, as well as intragovernmental debt; intragovernmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment, debt instruments for the social funds are not sold at public auctions

Reserves of foreign exchange and gold
$4.614 billion (31 December 2017 est.)
$3.514 billion (31 December 2016 est.)
$432.7 billion (31 December 2017 est.)
$377.7 billion (31 December 2016 est.)
Current Account Balance
-$222 million (2019 est.)
-$99 million (2018 est.)
$65.311 billion (2019 est.)
$115.68 billion (2018 est.)
GDP (official exchange rate)
$30.33 billion (2017 est.)
$1.578 trillion (2017 est.)
Stock of direct foreign investment - at home
$18.84 billion (31 December 2017 est.)
$15.36 billion (31 December 2016 est.)
$535.2 billion (31 December 2017 est.)
$461.7 billion (31 December 2016 est.)
Stock of direct foreign investment - abroad
$3.402 billion (31 December 2017 est.)
$2.485 billion (31 December 2016 est.)
$470.9 billion (31 December 2017 est.)
$418 billion (31 December 2016 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.)
$635.9 billion (31 December 2016 est.)
$393.2 billion (31 December 2015 est.)
$385.9 billion (31 December 2014 est.)
Central bank discount rate
0% (31 December 2017 est.)
0.05% (31 December 2015 est.)
10% (31 December 2016 est.)
11% (3 August 2015)

note: this is the so-called refinancing rate, but in Russia banks do not get refinancing at this rate; this is a reference rate used primarily for fiscal purposes

Commercial bank prime lending rate
2.58% (31 December 2017 est.)
2.61% (31 December 2016 est.)
10.55% (31 December 2017 est.)
12.59% (31 December 2016 est.)
Stock of domestic credit
$17.27 billion (31 December 2017 est.)
$15.11 billion (31 December 2016 est.)
$940.4 billion (31 December 2017 est.)
$827.3 billion (31 December 2016 est.)
Stock of narrow money
$12.91 billion (31 December 2017 est.)
$10.71 billion (31 December 2016 est.)
$255.2 billion (31 December 2017 est.)
$195.9 billion (31 December 2016 est.)
Stock of broad money
$12.91 billion (31 December 2017 est.)
$10.71 billion (31 December 2016 est.)
$255.2 billion (31 December 2017 est.)
$195.9 billion (31 December 2016 est.)
Taxes and other revenues
37.5% (of GDP) (2017 est.)
16.4% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)
-0.5% (of GDP) (2017 est.)
-1.4% (of GDP) (2017 est.)
Unemployment, youth ages 15-24
total: 12.2%
male: 12.5%
female: 11.8% (2018 est.)
total: 17%
male: 16.2%
female: 17.9% (2018 est.)
GDP - composition, by end use
household consumption: 61.8% (2017 est.)
government consumption: 18.2% (2017 est.)
investment in fixed capital: 19.9% (2017 est.)
investment in inventories: 1.5% (2017 est.)
exports of goods and services: 60.6% (2017 est.)
imports of goods and services: -61.9% (2017 est.)
household consumption: 52.4% (2017 est.)
government consumption: 18% (2017 est.)
investment in fixed capital: 21.6% (2017 est.)
investment in inventories: 2.3% (2017 est.)
exports of goods and services: 26.2% (2017 est.)
imports of goods and services: -20.6% (2017 est.)
Gross national saving
20.7% of GDP (2017 est.)
21% of GDP (2016 est.)
21.8% of GDP (2015 est.)
26.5% of GDP (2017 est.)
25.9% of GDP (2016 est.)
26.8% of GDP (2015 est.)

Source: CIA Factbook