The Latvian economy has experienced strong growth in the service sector and growing demand in the industrial sector. The agricultural sector has also stimulated the economy through the production and high volume of timber exports.

The Latvian economy rose steadily between 2005 and 2008 due to an increase in consumption and investments, however declined in 2009 and 2010 (till Q3) during the global recession.

(Source: Government Statistics)

GDP was LVL 13.1 billion in  2009, a decrease of approximately 24% compared to 2008. Per capita GDP stood at LVL 5,802 for 2009, a fall of 23.13% compared to the previous year.

Up until Q3 2010, GDP growth increased substantially from -18% in 2008 to -1.7% in 2010.

(Source: Central Bank Latvia, Statistics of Latvia)

Latvia's GNI was LVL 3,297.08 million for Q3 2010 compared to LVL 3,247.39 million in Q2 2010. Per Capita GNI was USD 12,390 in 2009.

(Source: Statistics of Latvia, World Bank)

In 2010, Latvia’s GNI per capita at PPP was USD 12,944. In 2005, GNI per capita PPP was USD 13,523.

(Source: UNDP)

In 2010, Latvian exports amounted to LVL 4,666.6 million, while imports were valued at LVL 5840.8 million. In 2009, the trade balance was in deficit of LVL 1,107.6 million. Exports and imports in 2009 amounted to LVL 3,602.2 million and LVL 4,709.8 million respectively.

(Source: Statistics of Latvia)

Tax rates

Income Tax for individuals in Latvia is 23%, of which 83% is allocated to local government budgets and the remaining 17% is allocated to the state budget.

Corporate income tax, paid by legal corporates and offices of non residents is 15% and makes up part of the basic state budget.

VAT is set at 21% which is paid by legal entities and individuals.

(Source: Ministry of Finance)

Inflation rate

The inflation rate in Latvia declined in 2009 and increased again in 2010 (till Q3). Inflation, in terms of consumer price change (annual %), was 3.5% in 2009.

(Source: Central Bank of Latvia)

The global rise in food and fuel prices also contributed to the rise in prices in domestic markets.

Foreign direct investment (FDI)

FDI Inflows to Latvia in 2009 declined sharply to LVL 47.6 million compared to LVL 606.5 million in 2008. Net FDI flows for Q4 2010 were LVL 119.7 million compared to LVL 44 million in Q2 2010. In 2009, net FDI flows were LVL 47.6 million, whereas in 2008 they were LVL 606.4 million.

(Source: Statistics of Latvia)

Banking sector assets

Total assets of the Central Bank of Latvia at the end of November 2010 were LVL 4,208.9 million, while in 2009 assets were valued at LVL 3,560.3 million.

(Source: Central Bank of Latvia)

Consumer price index (CPI)

CPI in Latvia has been on a steady rise since August 2010, due to a rise in prices of food and fuel.

Base Year 2005 = 100

(Source: Statistics of Latvia)

Producer price index (PPI)

Base: 2005 = 100

In 2010, the producer price index in Latvia was 140.9, growing at an annual rate of 2.98% in 2009. However the PPI declined in 2009 by 4.7% over 2008.

(Source: Statistics of Latvia)

Interest rates

The interest rates on long term deposits and short term credits decreased between 2008 and 2010.

(Source: Statistics of Latvia, Central bank of Latvia)

Money supply

Latvia has a 3-level money supply system: M1, M2 and M3. M1 includes currency outside of financial institutions and overnight deposits. M2 is the total of M1, term deposits with a maturity period of up to 2 years and M3 includes M2, debt securities, money market fund shares and units.

The steady growth in the money supply and other economic indicators show signs of Latvia's recovery from the recession. In Q3 2010, annual growth rates for money supply indicators M1, M2 and M3 were 15.5%, 9.7% and 10.55 respectively.

(Source: Central Bank of Latvia)

Government expenditure

Government expenditure in Latvia was LVL 5777.2 million in 2009, a decrease of about 9.34% compared to 2008. Although revenues are in decline, the fiscal deficit increased to LVL 1333.8 million compared to LVL 671.5 million in 2008.

(Source: Statistics of Latvia)

Official exchange rates

(Source: Statistics of Latvia)

Government finances

Fiscal balance

In 2009, the government deficit was LVL 1,338.8 million accounting for 10.2% of GDP.

(Source: Statistics of Latvia, Central Bank of Latvia)

Total revenue

Latvia's government took in revenues of LVL 4,443.4 million in 2009, a decrease of 26.16% over 2008. A large proportion of government revenue is derived from taxes and social contributions made by employers, employees and self or non-employed people.

(Source: Statistics of Latvia)

Tax revenue

Tax Revenues in Latvia declined by about 42% in 2009 and amounted to LVL 2,338.8 million. Tax revenues in Latvia are made up of, taxes on production, imports, income of individuals and other legal entities.

(Source: Statistics of Latvia)

Current account balance

The current account shows exports and imports of goods and services, income and expenses, as well as current transfers in a specified period of time. In 2009, Latvia was running a current account surplus of LVL 1,250.02 million, whereas in 2008, it was in deficit of LVL 2,113.39 million.

(Source: Central Bank of Latvia)

Balance of payment

(Source: Central Bank of Latvia)

The size of the labour force in Latvia was 1.17 million people in Q3 2010, an increase of 0.76% compared to 2009.

The unemployment rate as a percentage of the total labour force was on a rise from Q2 2008 to Q1 2010. The reference age group for the unemployment rate is 15-74 years of age.

(Source: Statistics of Latvia)

Employment by type of economic activity

In 2010 (until Q3), employment levels across all sectors, except in agriculture and the educational services sector, decreased compared to 2009.

(Source: Statistics of Latvia)

Minimum wage

Since September 2010, the average monthly wages of people in employment in Latvia has been LVL 442, decreasing from 2009 wages of LVL 461.

(Source: Statistics of Latvia)

Level of unionisation

There is a single union confederation for all union members in Latvia and about 16% of all employees participate in trade unions.

(Source: worker-participation.eu)

The Free Trade Union Confederation of Latvia (LBAS) is a non-governmental organisation in Latvia, which protects the interests of trade union members. It coordinates the activities of 21 independent trade unions in Latvia. At present LBAS unites more than 15% of all workers in Latvia in almost 2900 states, municipals and private enterprises.

(Source: Free Trade Union Confederation of Latvia)

The parliament in Latvia is known as the Saeima. Parliament is unicameral with 100 members who serve for a term of four years.

The Saeima is the only body to be directly elected by the people and has a core function in the Latvian political system. The head of state i.e. the president is elected by parliament or an electoral body for a term of four years. The president represents the state in international relations and has the power to initiate legislation.

The executive power is exercised by the government, headed by the prime minister. The president invites the candidate put forward for the post of prime minister to invite ministers to form the government. Candidates receive a vote of confidence by the Saeima and are then able to exercise their duties.

(Source: Government Statistics)

The Saeima consists of 5 parties – Unity (33 deputy seats), Association of Political Parties “Harmony Centre” (29 deputy seats), Union of Greens and Farmers (22 deputy seats), National Association “All For Latvia”- “For Fatherland and Freedom/LNNK” (8 deputy seats) and Association of Parties “For Good Latvia” (8 deputy seats).

(Source: Central Election commission of Latvia)

Regulatory environment

Latvia has a parliamentary democracy where all powers lie with the 100 members of parliament who are elected directly, in secret and through proportional elections, for a period of four years. The Latvian parliament is known as SAEIMA and elects the president for a term of four years, who is however prohibited from holding office as president for more than eight consecutive years.

(Source: Government Statistics)

Latvia's economic freedom score is 65.8, making its economy the 56^th freest in the 2011 Index. Its score declined by 0.4 points over 2010 index. Latvia is ranked 24^th out of 43 countries in the Europe region, and its overall score is above the world average.

(Source: heritage.org)

Corruption perception

Latvia ranked 59^th on World’s Corruption Perception Index 2010. Latvia has a score of 4.3 (out of 10). Latvia is more corrupt than its neighbouring countries Lithuania and Estonia ranked 46^th and 26^th respectively.

(Source: Transparency.org)

Freedom of information

The World Press Freedom Index 2010 ranks Latvia at 30^th position with a score of 8.50.

(Source: rsf.org)

The major newspapers in the country are Diena, Neatkariga Rita Avize, Dienas Bizness, Telegraf, Latvijas Avize, Chas.

Some of the broadcasters in Latvia are Latvian Television (LTV), TV3 Latvia and TV6.

(Source: BBC)

Judicial System

The judiciary in Latvia consists of

• The Supreme Court
• Regional Courts
• District (City) Courts

The Supreme Court is the highest level court in the three-tiered Latvian court system, which has been in place since 1995. The first level courts are the district (city) courts, the second level are the regional courts and the highest level is the Supreme Court. This three-tiered system ensures that the decisions of the courts of first instance can be appealed and reviewed at higher levels.

The Supreme Court is composed of two separate judicial bodies: the Senate and the Supreme Court Chambers. The Senate is the final and supreme judicial body in Latvia that accepts cassation (final) appeals in all types of cases. There are three departments in the Senate: the Department of Civil Cases, the Department of Criminal Cases and the Department of Administrative Cases. The Chamber of Criminal Cases and the Chamber of Civil Cases are the appeals bodies which review cases that have been decided on by the regional courts, as the court of first instance. The Supreme Court in 2011 was composed of  25 senators (judges of the senate) and 24 judges in Chambers.

(Source: Supreme Court)

In 2010, the population of Latvia was 2,229,500, a decrease of 0.85% over 2009.

(Source: Statistics of Latvia)

In 2009, the total population was  2.25 million and men accounted for 1.04 million and women for 1.21 million. The female population level was slightly higher than the male population.

(Source: Statistics of Latvia)

The population density was about 35 people per sq km. The Riga region is the most densely populated area, with approximately 2,331 people per sq km. Between 2004-2010, the population of the country continuously declined due to higher death rates and an increase in emigration.

(Source: Statistics of Latvia)

In 2009, majority of the population i.e. about 63.64%, belonged to the age group of 15 to 59 years and about 22.61% population belonged to the age group of 60+ years. The age group between 0-14 years accounted for 13.75% of the population.

(Source: Statistics of Latvia)

(Source: Statistics of Latvia)

Birth and death rate

The crude birth rate during 2009 remained at 9.6 live births per 1,000 people compared to 8.8 live births in 2005, an increase of 8.64%.

The average death rate was around 13.3 deaths per 1,000 people during 2009. As a result of improvement in maternal and child health services, the country recorded a decrease in infant mortality rate from 2.3 per 1,000 live births in 2005 to 1.6 in 2009.

(Source: Statistics of Latvia)

(Source: Statistics of Latvia)

Average life expectancy

In 2009, the average life expectancy at birth was 68.3 years for males and 78.1 for females.

(Source: Statistics of Latvia)

Infant mortality rate

In 2009, the country had an infant mortality rate of 7.8 deaths per 1,000 live births.

(Source: Statistics of Latvia)

Migration

In 2010, the net migration figure for 2010 was estimated at -8113, indicating that the number of emigrants was more than number of immigrants.

(Source: Statistics of Latvia)

Racial/Ethnic environment

The ethnic groups in Latvia are Latvians, Russians, Belarussians, Ukrainians, Poles, Lithuanians, Jews, Roma, Germans and Estonians.

(Source: Statistics of Latvia)

Human development index (HDI)

The country ranked 48^th on the HDI 2010, based on factors like life expectancy at birth, mean and expected years of schooling, gross national per capita income, etc.

(Source: HDR UNDP)

The Latvian education system includes the following:

• Pre–school
• Basic Education
• Secondary Education
• Vocational education and training
• Higher education

General education establishments have made it mandatory for children aged 5-7 years of age to attend pre-school and obtain basic education up until the age of 16.  The curriculum is determined by the national basic education standard.

There are two types of secondary education programmes:

• General secondary
• Vocational secondary education and training programmes

Secondary education lasts for 12 years (i.e. 9 years of basic education and 3 years of secondary education).

Pre-school, basic and secondary education in a state or municipality founded educational establishment is free and is financed through the national and municipal budget.

(Source Ministry of Education)

(Source: Statistics of Latvia)

Healthcare resources

(Source: Statistics of Latvia)

Mass Public Transit

People in Latvia mainly travel by bus, train, tram and trolley-bus. In 2010, the total number of registered vehicles was approximately 730,804, including passenger cars, buses, commercial vehicles and motorcycles.

(Source: Statistics of Latvia)

The roadway length in Latvia is 73,073.75 km. The road network has road classifications including state roads (20,177.69 km), municipal roads (39,254.06 km), forest roads (10,142 km) and private roads (3,500 km). The road infrastructure includes 932 bridges with a total length of 29.97 km.

(Source: Latvian State Roads)

The railway network for public use is managed by LDz, Latvijas Dzelzcels (Latvian Railways). The rail network consists of 152 stations (operating points) with extended tracks, 70 of them are open to freight operations and has a 2206.3 km long rail route.

(Source: Latvian Railways)

Ports

Latvia has 3 major ports which are, Liepaja, Riga and Ventspils, along with seven smaller ports - Skulte, Mersrags, Salacgriva, Pavilosta, Roja, Lielupe and Engure. The larger ports are mainly involved in processing 80% of the transit freight. The smaller ports are significant to local communities and are centres of economic activity at a regional level.

(Source: Ministry of Transport)

Airports

There are 4 airports in Latvia 

• Daugavpils
• Liepaja
• Riga International
• Ventspils International Airport

(Source: world-airport-codes)

Telecommunication networks

Internet Usage in Latvia is growing at a steady space. In 2009, 62.5% of the population in Latvia had internet access, compared to 60.9 in 2008.

(Source: Statistics of Latvia)

Public housing stock

Between 2008 and 2010, the housing stock for new residential buildings declined sharply  by 324%.

(Source: Statistics of Latvia)