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Economic overview
Latvia — 34 years of data
Historical Values
| Year | Value |
|---|---|
| 1992 | Latvia is in the process of reforming the centrally planned economy inherited from the former USSR into a market economy. Prices have been freed, and privatization of shops and farms has begun. Latvia lacks natural resources, aside from its arable land and small forests. Its most valuable economic asset is its work force, which is better educated and disciplined than in most of the former Soviet republics. Industrial production is highly diversified, with products ranging from agricultural machi |
| 1993 | Latvia is in the process of reforming the centrally planned economy inherited from the former USSR into a market economy. Prices have been freed, and privatization of shops and farms has begun. Latvia lacks natural resources, aside from its arable land and small forests. Its most valuable economic asset is its work force, which is better educated and disciplined than in most of the former Soviet republics. Industrial production is highly diversified, with products ranging from agricultural machi |
| 1994 | Latvia is rapidly becoming a dynamic market economy, rivaled only by Estonia among the former Soviet states in the speed of its transformation. The transition has been painful with GDP falling over 45% in 1992-93, according to official statistics, and industrial production experiencing even steeper declines. Nevertheless, the government's tough monetary policies and reform program, which foster the development of the private sector and market mechanisms, have kept inflation low, created a dynami |
| 1995 | Latvia is rapidly becoming a dynamic market economy, rivaled only by Estonia among the former Soviet states in the speed of its transformation. However, the transition has been painful; in 1994 the IMF reported a 2% growth in GDP, following steep declines in 1992-93. The government's tough monetary policies and reform program have kept inflation at less than 2% a month, supported a dynamic private sector now accounting for more than half of GDP, and spurred the growth of trade ties with the West |
| 1996 | Latvia's economic transformation to a modern market economy - rivaled only by Estonia among the former Soviet states - faltered in 1995 as a result of banking and budget crises. Latvia's largely unregulated financial sector suffered a series of bank failures, including the collapse of the country's largest commercial bank - Bank Baltija - due largely to criminal activity by the owners. The government's attempts to compensate depositors of failed banks exacerbated an existing budget shortfall; po |
| 1997 | In the five years following the implosion of the USSR in December 1991, the Latvian economy has made substantial progress toward establishing a modern market economy and widening economic ties with the West. Two major long-term concerns are the growing trade deficit and the impact of organized crime. The economy in 1996 has largely recovered from the mid-1995 collapse of several commercial banks - including Latvia's large bank, Bank Baltija - and a severe government budget crisis. Prime Minister |
| 1998 | In 1997 Latvia scored the most impressive economic achievements since independence in 1991, with GDP growing by 6% and inflation at 7.4%. GDP is expected to grow 5% in 1998 and inflation to range between 6% and 7%. In 1997 Latvia continued its strict fiscal policy and apparently ended the year with a small fiscal surplus, reflecting higher-than-expected income from customs revenues, excise and business taxes, and restraints on government spending. Foreign direct investment (FDI) in 1997 was a re |
| 1999 | Developments in 1998 include an invitation to join the World Trade Organization (the first Baltic country invited), GDP growth of 3.6% (down from 6% in 1997), and reduced inflation at 4.7% (from 8.4% in 1997). The drop in GDP growth is largely attributable to the impact of Russia's financial crisis and reduced investment in emerging markets following the Asian financial troubles. Unofficial sanctions that Russia imposed in the spring initially hit Latvia's exporters--Russia is among Latvia's top |
| 2000 | In 1999 Latvia, a transitional economy, experienced zero GDP growth as it continued to feel the impact of the August 1998 Russian financial crisis. Latvia officially joined the World Trade Organization (WTrO) in February 1999 - the first Baltic state to join - band was invited at the Helsinki EU Summit in December 1999 to begin accession talks in early 2000. Unemployment reached 9.6% in 1999, up from 9.2% in 1998 and 6.7% in 1997. Privatization of large state-owned utilities, especially the ener |
| 2001 | In 2000, Latvia's transitional economy recovered from the 1998 Russian financial crisis, largely due to the SKELE government's budget stringency and a gradual reorientation of exports toward EU countries, lessening Latvia's trade dependency on Russia. Latvia officially joined the World Trade Organization in February 1999 - the first Baltic state to join - and was invited at the Helsinki EU Summit in December 1999 to begin accession talks in early 2000. Unemployment fell to 7.8% in 2000, down fro |
| 2002 | Latvia's transitional economy recovered from the 1998 Russian financial crisis, largely due to the SKELE government's budget stringency and a gradual reorientation of exports toward EU countries, lessening Latvia's trade dependency on Russia. The majority of companies, banks, and real estate have been privatized. Latvia officially joined the World Trade Organization in February 1999. Preparing for EU membership over the next few years continues as a top foreign policy goal. The high current acco |
| 2003 | Latvia's transitional economy recovered from the 1998 Russian financial crisis, largely due to the SKELE government's budget stringency and a gradual reorientation of exports toward EU countries, lessening Latvia's trade dependency on Russia. 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. Preparing for EU membership continues a |
| 2004 | Latvia's transitional economy recovered from the 1998 Russian financial crisis, largely due to the SKELE government's budget stringency and a gradual reorientation of exports toward EU countries, lessening Latvia's trade dependency on Russia. 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. Preparing for EU membership continues a |
| 2005 | Latvia's transitional economy recovered from the 1998 Russian financial crisis, largely due to the government's budget stringency and a gradual reorientation of exports toward EU countries, lessening Latvia's trade dependency on Russia. 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, cam |
| 2006 | Latvia's transitional economy recovered from the 1998 Russian financial crisis, largely due to the government's budget stringency and a gradual reorientation of exports toward EU countries, lessening Latvia's trade dependency on Russia. 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, cam |
| 2007 | Latvia's economy experienced average GDP growth of more than 7.0% over the past several years. In 2006 it reached 10.2% real GDP growth. 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 - more than 15% of GDP in 2006 - and inflation remain maj |
| 2008 | Latvia's economy experienced GDP growth of more than 10% per year during 2006-07. 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 - more than 22% of GDP in 2007 - and inflation - at nearly 10% per year - remain major concerns. |
| 2009 | 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 |
| 2010 | 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. GDP plunged 18% in 2009 - the three former Soviet Baltic republics had the world's worst declines that year - and another 1.8% in 2010. 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 r |
| 2011 | Latvia is a small, open economy with exports contributing significantly to its 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 electronic devices. The bulk of the country's economic activity, however, is in the services sector. Corruption continues to be an impediment to attracting FDI flows and Latvia's low birth rate and decreasing population are major challeng |
| 2012 | 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 experien |
| 2013 | 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 experien |
| 2014 | 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 experien |
| 2015 | 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 experien |
| 2016 | 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 experi |
| 2017 | 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 experi |
| 2018 | 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 experien |
| 2019 | 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 experien |
| 2020 | 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 experien |
| 2021 | 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 experien |
| 2022 | 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 experien |
| 2023 | high-income, EU-member Baltic economy; export-driven; Russian invasion of Ukraine has caused a temporary labor force surge and impacted growth due to Russian trade reliance; highly developed transit services |
| 2024 | high-income EU and eurozone member; economic contraction triggered by export decline and energy shocks; recovery driven by easing inflation, wage growth, and investments supported by EU funds; challenges from skilled labor shortages, capital market access, large informal sector, and green and digital transitions |
| 2025 | high-income EU and eurozone member; weak recovery following economic contraction, with slight increase in private consumption and uncertain trade environment; challenges from skilled-labor shortages, capital market access, large informal sector, and green and digital transitions |