Economy - overview 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 record $880 million by yearend. Prospects for increasing FDI in 1998 are good if Latvia privatizes at least some of its large companies, including Venspils Nafta (the state oil company). Although Latvia was disappointed that it was not included among the five Central and East European states invited to start EU accession talks in spring 1998, it is likely to join the WTrO in 1998. Latvia's growing current account and trade deficits remain a cause for concern, reaching nearly 10% by yearend. Latvia's trade deficit may even reach 22% of GDP in 1998.

GDP purchasing power parity - $10.4 billion (1997 est.)

GDP - real growth rate 6% (1997 est.)

GDP - per capita purchasing power parity - $4,260 (1997 est.)

GDP - composition by sector
agriculture: 9%
industry: 34%
services: 57% (1995)

Inflation rate - consumer price index 7.4% (1997 est.)

Labor force
total: 1.4 million (1997)
by occupation: industry 41%, agriculture and forestry 16%, services 43% (1990)

Unemployment rate 7% (1996)

Budget
revenues: $NA
expenditures: $NA, including capital expenditures of $NA

Industries buses, vans, street and railroad cars, synthetic fibers, agricultural machinery, fertilizers, washing machines, radios, electronics, pharmaceuticals, processed foods, textiles; dependent on imports for energy, raw materials, and intermediate products

Industrial production growth rate 2% (1996 est.)

Electricity - capacity 2.035 million kW (1995)

Electricity - production 4.095 billion kWh (1995)

Electricity - consumption per capita 2,300 kWh (1995)

Agriculture - products grain, sugar beets, potatoes, vegetables; meat, milk, eggs; fish

Exports
total value: $1.4 billion (f.o.b., 1996)
commodities: wood and wood products, textiles, foodstuffs
partners: Russia, other CIS, Germany, Sweden, UK

Imports
total value: $2.3 billion (c.i.f., 1996)
commodities: fuels, machinery and equipment, chemicals
partners: Russia, other CIS, Germany, Sweden, UK, Finland

Debt - external $NA

Economic aid
recipient: ODA, $122 million (1993)
note: commitments from the West and international institutions, $525 million (1992-95)

Currency 1 Latvian lat (LVL) = 100 santims; introduced NA March 1993

Exchange rates lats (LVL) per US$1 - 0.595 (January 1998), 0.581 (1997), 0.551 (1996), 0.528 (1995), 0.560 (1994), 0.675 (1993)

Fiscal year calendar year

NOTE: The information regarding Latvia on this page is re-published from the 1998 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Latvia Economy 1998 information contained here. All suggestions for corrections of any errors about Latvia Economy 1998 should be addressed to the CIA.