Economy - overview In the five years following the implosion of the USSR in December 1991,the Latvian economy has made substantial progress toward establishing a modernmarket economy and widening economic ties with the West. Two major long-termconcerns are the growing trade deficit and the impact of organized crime.The economy in 1996 has largely recovered from the mid-1995 collapse of severalcommercial banks - including Latvia's large bank, Bank Baltija - and a severegovernment budget crisis. Prime Minister SKELE has stated that he expectsthe country's GDP to grow 5% in 1997 through the implementation of the government'snew economic reform program. In December 1996, the government passed a balanced1997 budget - its first - that SKELE predicts will reduce inflation to 10%to 12% in 1997. Unemployment, which has held steady at about 6% over the pasttwo years, reached roughly 7.5% in 1996. One of SKELE's key objectives for1997 is to speed up the privatization program, which has lagged behind otherareas of reform.

GDP purchasing power parity - $9.4 billion (1996 est.)

GDP - real growth rate 2.5% (1996 est.)

GDP - per capita purchasing power parity - $3,800 (1996 estimate as extrapolated fromWorld Bank estimate for 1994)

GDP - composition by sector
agriculture: 9%
industry : 34%
services: 57% (1994)

Inflation rate - consumer price index 13.2% (1996 est.)

Labor force
total: 1.268 million (1995)
by occupation: industry 41%, agriculture and forestry 16%, services 43% (1990)

Unemployment rate 7.5% (1996 official est.)

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

Industries buses, vans, street and railroad cars, synthetic fibers, agriculturalmachinery, 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 2.018 million kW (1993)

Electricity - production 4.27 billion kWh (1994)

Electricity - consumption per capita 2,197 kWh (1995 est.)

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

Exports
total value: $1.6 billion (f.o.b., 1996)
commodities: machinery and equipment, timber, textiles, foodstuffs
partners : Russia, other CIS, Germany, Sweden, UK

Imports
total value: $2.4 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 - 0.563 (January 1997), 0.551 (1996), 0.528 (1995),0.560 (1994), 0.675 (1993), 0.736 (1992)

Fiscal year calendar year

NOTE: The information regarding Latvia on this page is re-published from the 1997 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Latvia Economy 1997 information contained here. All suggestions for corrections of any errors about Latvia Economy 1997 should be addressed to the CIA.