Latvia

latvia

Quick facts:

Territory 64,589 km2
Population 2.07 million
Currency Euro (EUR)
Capital Riga
Official language Latvian (appr. half of the population speaks Russian as native, English is widely spoken)
Memberships EU, NATO, Council of Europe, CBSS, OSCE, IMF, UN, WTO
Real GDP per capita 6,800 EUR per inhabitant (2012)
Growth of GDP, % 5% (2012). Forecast: 4.0% in 2013, 4.1% in 2014, 4.2% in 2015
Average gross salary 748 EUR (2012)
VAT rate 21% (standard), reduced rates: 12% and 0%
Company Income Tax 15%, for non-residents 2%-15%
Phone code +371
Top domain .lv

In the pre-crisis period, supported by cheap and accessible credit and a boom in domestic consumption, Latvia’s economy experienced a period of remarkably rapid growth (of more than 10%) and transformation enjoying growing FDI inflows. Along with expansion of the service sector as a proportion of GDP and decrease in the agricultural sector share, the economy continued to develop its own niche in global markets.

In 2008, due to an unsustainable economic policy and the impact of the global financial crisis, the country entered into a phase of severe economic downturn. In 2009 Latvia’s GDP decreased by 18% year-on-year mainly due to a fall in the retail trade sector and manufacturing, as well as a decrease in government spending. The rate of unemployment reached almost 23% resulting in weakened consumer spending.

According to the Latvian Ministry of Foreign Affairs, in February 2010, Standard & Poor’s changed the future perspective of Latvia’s rating from negative to stable, based on the following main reasons: the ongoing economic recovery, reduction of the global imbalances, government’s efforts in stabilisation of the state financial sector. In 2009-2011 international financial support of EUR7.5 billion was available for Latvia. During 2013 -2015 the Latvian GDP is expected to grow at 4-4.2% per year.

Key opportunity sectors: Information Technology, Green Energy & Technologies, Transportation & Logistics, Metalworking & Machinery, Electronics, Food Processing, Construction, Healthcare, Real Estate, Financial Services and many others.

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