An Overview of the Economy
Latvia's economy has been highly dependent on manufacturing and
services and until recently was strongly linked to the Russian
economy. However, since joining the EU, Latvia has
been committed to turning its state-run economy, inherited
from years as a soviet republic, to a market economy. The country
is encouraging foreign investment to boost its market further.
Latvian currency, the lat, has been pegged to the Euro from 2005
and by 2012 Latvia is expected to have adopted the Euro.
Latvia is one of the fastest growing countries in the EU in
terms of GDP, averaging at 10.4% between 2004 and 2006. GDP was
recorded at 11.9% over 2006, an impressive amount of growth that
has since fallen to 10.3% in 2007. After joining the EU in May
2004, Latvia suffered very rapid inflation levels. Unsustainable
real estate price growths in recent years have been perceived as
too high for the economy, prompting the government to introduce
anti-inflation plans to curb growth.
| statistics |
|
| GDP (PPP) (IMF) (US$Billions) |
39.7 |
| GDP (PPP) (CIA) (US$Billions) |
40.0 |
| GDP Growth (IMF) (%) |
10.2% |
| GDP Growth (CIA) (%) |
10.3% |
| GDP Per Capita (PPP) (IMF) (US$) |
17,416 |
| GDP Per Capita (PPP) (CIA) (US$) |
17,416 |
| GDP by Sector (%) |
Agriculture: 3.5%
Services: 75.2%
Industry: 21.3% |
| Inflation (%) |
9.6% |
| Population Below the Poverty Line (%) |
- |
| Labour Force (Millions) |
1.13 |
| Labour Force by Occupation (%) |
Agriculture: 13%
Services: 68%
Industry: 19% |
| Unemployment (%) |
5.9% |
| Main Industries |
Buses, vans, street and railroad cars,
synthetic fibres, agricultural machinery,
fertilisers, washing machines, radios,
electronics, pharmaceuticals, processed
foods, textiles. |
Sources: CIA World Factbook, IMF
GDP
GDP has been growing at high rates averaging around 10.4%
between 2004 and 2006. 2007 showed GDP growth of 10.3%.
| economic indicators |
2003 |
2004 |
2005 |
2006 |
2007 |
| GDP (US$BIllions) |
11.2 |
13.8 |
16.0 |
20.1 |
27.0 |
| GDP Growth (%) |
8.0% |
8.5% |
7.8% |
6.8% |
10.3% |
| GDP Per Capita (US$) |
4,798 |
5,933 |
6,955 |
8,760 |
11,984 |
| GDP Per Capita (PPP) (US$) |
10,262 |
11,505 |
13,181 |
15,297 |
17,416 |
| Inflation (%) |
3.0% |
6.0% |
6.3% |
5.1% |
9.6% |
| Unemployment (%) |
7.6% |
8.6% |
8.8% |
6.5% |
5.9% |
Foreign-Exchange
& Gold Reserves (US$Billions) |
- |
1.6 |
1.7 |
2.2 |
5.2 |
| Mobile Phone Users |
401,263 |
1,219,600 |
1,219,600 |
1,872,000 |
2,184,000 |
| Internet Users |
312,000 |
936,000 |
936,000 |
1,030,000 |
1,071,000 |
Sources: CIA World Factbook, IMF
Major Exports & Imports
Important major exports from Latvia are textiles, foodstuffs,
wood products, machinery and equipment. The country's major
export partners are Lithuania, Estonia and Russia.
Important major imports to Latvia are fuels, vehicles and
chemicals, the majority coming from Lithuania, Germany and
Russia.
major exports 2007
Wood and wood products, machinery and equipment, metals,
textiles, foodstuffs.
major imports 2007
Machinery and equipment, chemicals, fuels, vehicles.
| export partners |
% of total |
| Lithuania |
14.2% |
| Estonia |
12.0% |
| Russia |
11.5% |
| Germany |
9.8% |
| import partners |
% of total |
| Germany |
15.5% |
| Lithuania |
12.9% |
| Russia |
8.0% |
| Estonia |
7.7% |
Source: CIA World Factbook
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