Latvia has one of the highest GDP growth rates in Europe. However, the growth was spurred by rich consumption. This triggered a major landslide in growth when the recession marred years saw a decrease in demand. The Latvian economy fell 18% in the first quarter of 2009. The economy faced the worst impact in the EU.
Recession brought in the worst for Latvia’s economy, with a nearly 18% decline in the GDP. The IMF and EU bailed the country out of a serious situation, helping to decrease the fiscal deficit to 5% of the GDP. Most banks, companies and real estate firms have been privatized in Latvia, although there still is a need to fight the budget deficit that is increasing at a fast pace.
Amidst all this, the service sector remains the most active contributor of the national GDP, accounting for almost 72.4% of the GDP. The industry sector contributes almost 24% of the national GDP and agriculture sector chips in with 3.6%.
According to the 2009 figures, Latvia’s GDP (purchasing power parity) was $32.4 billion, which was significantly lower than the 2008 figure of $39.42 billion and the 2007 figure of $41.32 billion.