Latvia: Country and Foreign Investment
Economy and Currency
Like most of the ex-USSR countries, Latvia has had to cope with privatisation of most of its economy, but has also had to switch many of its eastern-pointing trade relationships towards the West. The country joined the WTO in 1999, and the EU in 2004.
However, Latvia’s geographical location has helped it remain a key transit point for north-south and east-west trade flows between the USA, the EU, the Far East, Russia, and the CIS; the transit sector is therefore one of Latvia’s main industrial sectors.
Other sectors include chemicals and pharmaceuticals, electronics, timber, food processing, mechanical engineering, and textiles and clothing. GDP per head was USD14,400 (2009). The GDP growth rate was -18% in 2009, -4.6% in 2008 and plus 10.3% in 2007.
Real estate in Latvia has suffered greatly from the global recession, with prices falling 75% since 2007. The unemployment rate in 2009 was 17.1%; a rise of nearly 10% from 2008. Latvia agreed with the EU in July 2009 to keep its 2009 deficit at 10%.
The currency is the Lat (LVL), which is pegged to the Euro at a rate of EUR1 = LVL0.7028. Plans to join the eurozone have been postponed; the Latvian central bank expects Latvia to adopt the Euro in 2014 at the earliest.