Page last updated on February 5, 2013
Economy - overview:
Latvia is a small, open economy with exports contributing nearly a third 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 softening world economy. Triggered by the collapse of the second largest bank, GDP plunged 18% in 2009. The economy has not returned to pre-crisis levels despite strong growth, especially in the export sector in 2011-12. 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. The government of Prime Minister Valdis DOMBROVSKIS remained committed to fiscal prudence and reducing the fiscal deficit from 7.7% of GDP in 2010, to 2.7% of GDP in 2012. The majority of companies, banks, and real estate have been privatized, although the state still holds sizable stakes in a few large enterprises, including 99.8% ownership of the Latvian national airline. Latvia officially joined the World Trade Organization in February, 1999 and the EU in May 2004. Latvia intends to join the euro zone in 2014.
GDP (purchasing power parity):
$37.04 billion (2012 est.)
country comparison to the world: 107
$35.46 billion (2011 est.)
$33.62 billion (2010 est.)
note:
data are in 2012 US dollars
[see also:
GDP country ranks ]
GDP (official exchange rate):
$27.19 billion (2012 est.)
[see also: GDP (official exchange rate) country ranks ]
GDP - real growth rate:
4.5% (2012 est.)
country comparison to the world: 70
5.5% (2011 est.)
-0.3% (2010 est.)
[see also:
GDP - real growth rate country ranks ]
GDP - per capita:
$18,100 (2012 est.)
country comparison to the world: 69
$17,100 (2011 est.)
$15,000 (2010 est.)
note:
data are in 2012 US dollars
[see also:
GDP - per capita country ranks ]
GDP - composition by sector:
agriculture: 4.4%
[see also: GDP - composition by sector - agriculture country ranks ]
industry:
26.3%
services:
69.3% (2012 est.)
Labor force:
1.139 million (2012 est.)
country comparison to the world: 141
[see also: Labor force country ranks ]
Labor force - by occupation:
agriculture: 8.8%
[see also: Labor force - by occupation - agriculture country ranks ]
industry:
24%
services:
67.2% (2010 est.)
Unemployment rate:
14.3% (2012 est.)
country comparison to the world: 141
12.8% (2011 est.)
[see also:
Unemployment rate country ranks ]
Population below poverty line:
NA%
[see also: Population below poverty line country ranks ]
Household income or consumption by percentage share:
lowest 10%: 2.7%
[see also: Household income or consumption by percentage share - lowest 10% country ranks ]
highest 10%:
27.6% (2008)
Distribution of family income - Gini index:
35.2 (2010)
country comparison to the world: 86
32 (1999)
[see also:
Distribution of family income - Gini index country ranks ]
Investment (gross fixed):
22.2% of GDP (2012 est.)
country comparison to the world: 66
[see also: Investment (gross fixed) country ranks ]
Budget:
revenues: $9.451 billion
[see also: Budget revenues country ranks ]
expenditures:
$10.18 billion (2012 est.)
Taxes and other revenues:
34.8% of GDP (2012 est.)
country comparison to the world: 71
[see also: Taxes and other revenues country ranks ]
Budget surplus (+) or deficit (-):
-2.7% of GDP (2012 est.)
country comparison to the world: 95
[see also: Budget surplus (+) or deficit (-) country ranks ]
Public debt:
44% of GDP (2012 est.)
country comparison to the world: 78
43.7% of GDP (2011 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
[see also:
Public debt country ranks ]
Inflation rate (consumer prices):
2.5% (2012 est.)
country comparison to the world: 50
4.4% (2011 est.)
[see also:
Inflation rate (consumer prices) country ranks ]
Central bank discount rate:
3.5% (31 December 2011 est.)
country comparison to the world: 98
3.5% (31 December 2010 est.)
[see also:
Central bank discount rate country ranks ]
Commercial bank prime lending rate:
6% (31 December 2012 est.)
country comparison to the world: 138
6.39% (31 December 2011 est.)
[see also:
Commercial bank prime lending rate country ranks ]
Stock of narrow money:
$8.237 billion (31 December 2012 est.)
country comparison to the world: 81
$8.174 billion (31 December 2011 est.)
[see also:
Stock of narrow money country ranks ]
Stock of broad money:
$12.09 billion (31 December 2012 est.)
country comparison to the world: 101
$12.12 billion (31 December 2011 est.)
[see also:
Stock of broad money country ranks ]
Stock of domestic credit:
$19.76 billion (31 December 2012 est.)
country comparison to the world: 86
$21.08 billion (31 December 2011 est.)
[see also:
Stock of domestic credit country ranks ]
Market value of publicly traded shares:
$1.076 billion (31 December 2011)
country comparison to the world: 105
$1.252 billion (31 December 2010)
$1.824 billion (31 December 2009)
[see also:
Market value of publicly traded shares country ranks ]
Agriculture - products:
grain, rapeseed, potatoes, vegetables; pork, poultry, milk, eggs; fish
Industries:
processed foods, processed wood products, textiles, processed metals, pharmaceuticals, railroad cars, synthetic fibers, electronics
Industrial production growth rate:
9% (2011 est.)
country comparison to the world: 18
[see also: Industrial production growth rate country ranks ]
Current account balance:
-$462.9 million (2012 est.)
country comparison to the world: 94
-$363 million (2011 est.)
[see also:
Current account balance country ranks ]
Exports:
$12.49 billion (2012 est.)
country comparison to the world: 85
$12.03 billion (2011 est.)
[see also:
Exports country ranks ]
Exports - commodities:
food products, wood and wood products, metals, machinery and equipment, textiles
Exports - partners:
Russia 15.7%, Lithuania 14.9%, Estonia 11.2%, Germany 6.9%, Sweden 5.2%, Poland 4.9% (2011)
Imports:
$15.92 billion (2012 est.)
country comparison to the world: 85
$14.83 billion (2011 est.)
[see also:
Imports country ranks ]
Imports - commodities:
machinery and equipment, consumer goods, chemicals, fuels, vehicles
Imports - partners:
Lithuania 16.6%, Germany 11%, Russia 7.7%, Poland 7.2%, Estonia 6.8%, Italy 4.2%, Finland 4.1% (2011)
Reserves of foreign exchange and gold:
$6.925 billion (31 December 2012 est.)
country comparison to the world: 80
