Latvia Industry Sectors, Latvia Industries

 

 

Latvia’s industry sectors are noted for their manufacturing wing. The manufacturing segment is focused on wood processing, textiles, machinery, and food processing. Latvia’s proximity to the Baltic Sea gives the nation the perfect location for transits as well for fostering its transport industry.[br]

Latvia Industry Sectors: Overview

Latvia’s manufacturing sector produces commodities such as electric rail cars, automobiles and consumer goods, including radios and other appliances. Wood products, steel, chemicals, cement, and electronics are also manufactured. Almost 20% of the FDI is directed at manufacturing.

According to the 2009 statistics, Latvia’s industry sector contributes 24% of the GDP and employs 24% of the workforce. However, the dependency on energy has checked the growth of the industry sector and created an imbalance in trade.

The various industries concentrated in Latvia are:

 

• Buses, vans, street and railroad cars

• Synthetic fibers

• Agricultural machinery

• Fertilizers

• Washing machines

• Radios, electronics

• Pharmaceuticals

• Processed foods

• Textiles 

With the recession leading to a decrease in the imports as well as investments in the industry sector, the sector suffered a contraction in its growth rate to -17.5%, making Latvia the 161^st country in terms of its industrial growth rate.

 

Most of the Latvia industries have been privatized, keeping in mind the active contribution they make. Only politically sensitive industries are state controlled. Privatization has also attracted FDI. The country reported its FDI at $11.46 billion in 2009, marking an increase from $11.21 billion in 2008. Latvia increased its FDI abroad as well to $1.103 billion as of December 31, 2009, as compared to $1.083 million in 2008. With such inflow, Latvia could restructure its current account as well. In 2009, the account registered a positive figure of $1.64 billion, up from -$4.492 billion in 2008.[br]

 

However, for the Latvian industry sector to increase its productivity, it is essential that the country increases its energy production, which was insufficient till 2009. The electricity consumption was $6.822 billion kWh, while Latvia produces only 4.62 billion kWh. Once energy production is increased and reaches a self sufficient level, the Latvian industry will face major challenges to development and productivity.