Latvia Economic Forecast

Prior to Latvia going into a recession in 2008, this country saw a significant 10% increase for Gross Domestic Product or GDP. During the time of recession, Latvia was struggling with serious public debt exposure, as well as a current account balance deficit that could not be maintained. To help boost Latvia’s economy, the European Union, International Monetary Fund or IMF, as well as a number of other donors provided aid.

Prior to Latvia going into a recession in 2008, this country saw a significant 10% increase for Gross Domestic Product or GDP. During the time of recession, Latvia was struggling with serious public debt exposure, as well as a current account balance deficit that could not be maintained. To help boost Latvia’s economy, the European Union, International Monetary Fund or IMF, as well as a number of other donors provided aid. Other changes seen with the Latvia economy is that some of the country’s primary companies, financial institutions, banks, and the real estate sector have been privatized. Additionally, Latvia became a member of the World Trade Organization (WTO) in 2004 but the most recent reports show that Latvia still has serious challenges with inflation and the account balance deficit.

Latvia GDP Forecast

Because of significant consumption, the Latvia GDP (Gross Domestic Product, Current Prices, US Dollar) has experienced excellent growth. Unfortunately, the world financial crisis took the country through a recession, a time when consumer demand dropped. In fact, because of this the first part of 2009 was hit with an 18% drop, which hit the European Union the hardest. By the close of 2008, Latvia’s GDP was at $34.05 billion in US dollars but then experiencing a decline of 22.91%, the following year of 2009 ended at a GDP of $25.247 billion. Using this historical data and special formulas, experts are now forecasting that 2010 will end around $23.96 billion and for 2015, change is insignificant with a year-end close of $27.964 billion, US dollars.

Latvia Unemployment Forecast

Currently, the Latvia population is just slightly more than 2.2 million, with the labor force working in a number of sectors. However, the services sector is by far the most essential, accounting for almost 73% of the country’s GDP. Other sectors that also support the working population include industry and agriculture. While Latvia has numerous natural resources and decent work opportunities, the Latvia unemployment rate is still 16.6%. From the 7.5% rate in 2008, we can see this is a significant increase to the number of people without jobs.

Latvia Inflation Rate Forecast

Forecasters also look at historical data so the current and future Latvia inflation rate can be determined. This means using data for the given year instead of end-of-period, and using a consumer price index of 2000=100. The 2008 inflation numbers for this country were at 15.25% but over the following 24 months, a reduction of 78.63% occurred, leaving 2009 to end at 3.26% In looking out to the close of 2010, numbers being forecasted are a minus 3.73% because of a huge decline of 214.54%. From that time to 2015, another dramatic change is being predicted, ending the year at 1.001% inflation.

Latvia Current Account Balance Forecast

For balance on current transactions to be formulated, capital and financial items are eliminated from the equations while goods, services, current transfers, and income are included. For the Latvia current account balance, 2008 was a minus $4.43 billion (US dollars), followed by a reduction that put 2009 at a positive $2.477 billion and placing the country at number 34 for world rankings. As far as the future, 2010 and 2015 are expected to see a current account balance at $1.69 billion and $1.119 billion in US dollars, respectively.