Latvia Economic Structure

 

 

Latvia’s economic structure is backed by a strong service sector that is helped by a demand generating industrial sector. The agricultural sector provides sufficiency and the vast forestlands aid in the exports. Latvia has been trying to introduce the euro in the nation but the inflation rates stop the EU from validating this attemppt and therefore the official deadline is January 1, 2012.[br]

Latvia’s economic structure is run mostly by the private sector, although politically sensitive large state companies remain under the state rule. This move, when it was implemented, helped the economy with almost 68% of the GDP (2000 stats).

Latvia Economic Structure: Primary Sector

The service sector remains the biggest contributor to the national GDP. In 2009, the service sector contributed 72.4% of the GDP, while creating 61.8% of the total employment opportunity for 1.205 million workforce. Information technology, spurred by an increase in demand for new products for better management and supervision, has been a huge service segment in Latvia. Tourism has been able to attract a lot of foreign exchange as well, thus helping the service sector in terms of employment as well as contribution to the GDP.

 

Latvia Economic Structure: Secondary Sector

The Latvian industry sector has not only generated huge demand for the service sector but has contributed to the GDP itself. Industry contributed 24% to the GDP in 2009 and employed 25.8% of the workforce. Manufacturing has been the pillar of the industry sector. With an abundance of timber, Latvia produces a lot of wooden products and has the capacity to increase productivity even further. Other well developed industries are:

 

• Buses, vans, street and railroad cars

• Synthetic fibers

• Agricultural machinery

• Fertilizers

• Washing machines

• Radios

• Electronics

• Pharmaceuticals

• Processed foods

• Textiles

The industry sector is, however, dependant on the imports of energy and raw materials.

Latvia Economic Structure: Tertiary Sector[br]

Agriculture provides self sufficiency for the food requirements and adds 3.6% to the GDP while absorbing 12.1% of the workforce. The main agricultural products are:

 

• Grain

• Sugar beets

• Potatoes

• Vegetables

• Beef

• Pork

• Milk

• Eggs

• Fish

The sector is still not fully explored in terms of machinery and the latest technology to increase the agricultural products. The Latvian economic structure can help itself with a highly productive agriculture sector.