Economy of Latvia

Economy of Latvia
	Riga with its Central Market in the view
Currency	Euro (EUR, €)
Fiscal year	Calendar year
Trade organisations	EU, OECD and WTO
Country group	Developed/Advanced; High-income economy;
Statistics
Population	1,853,400 (2024)
GDP	$45.52 billion (nominal, 2024); $81.79 billion (PPP, 2024);
GDP rank	97th (nominal, 2024); 106th (PPP, 2024);
GDP growth	2.0% (2022); −0.3% (2023); −0.4% (2024); 2.4% (2025f);
GDP per capita	$28,024 (nominal, 2026); $43,526 (PPP, 2024);
GDP per capita rank	47th (nominal, 2024); 47th (PPP, 2024);
GDP by sector	agriculture: 3.9%; industry: 22.4%; services: 73.7%; (2017 est.);
Inflation (CPI)	9.0% (2023); 1.3% (2024); 2.2% (2025f);
Population below poverty line	24.3% at risk of poverty or social exclusion (AROPE, 2024);
Gini coefficient	34.2 medium (2024)
Human Development Index	0.889 very high (2023) (41st); 0.812 very high (IHDI (38th)) (2023);
Corruption Perceptions Index	59 out of 100 points (2024) (38th)
Labour force	977,523 (2023); 77.5% employment rate (2023);
Labour force by occupation	agriculture: 7.7%; industry: 24.1%; services: 68.1%; (2016 est.);
Unemployment	6.8% (December 2024); 13.0% youth unemployment (15 to 24 year-olds; November 2024);
Average gross salary	€1,835 monthly (2025, Quarter 3)
Average net salary	€1,365 monthly (2025, Quarter 3)
Main industries	processed foods, processed wood products, textiles, processed metals, pharmaceuticals, railroad cars, synthetic fibers, electronics
External
Exports	$20.73 billion (2023)
Export goods	foodstuffs, wood and wood products, metals, machinery and equipment, textiles
Main export partners	Lithuania(+) 19%; Estonia(+) 6%; Germany(+) 6%; Russia(+) 6%; Sweden(+) 5%; (2023);
Imports	$25.49 billion (2023)
Import goods	machinery and equipment, consumer goods, chemicals, fuels, vehicles
Main import partners	Lithuania(+) 18%; Germany(+) 11%; Poland(+) 10%; Estonia(+) 8%; Finland(+) 5%; (2023);
FDI stock	Inward: $1.32 billion (2023); Outward: $0.63 billion (2023);
Current account	−$1.708 billion (2024); 3.75% of GDP (2024);
Public finances
Government debt	43.8% of GDP (2024); €19.90 billion (2024);
Foreign reserves	$4.95 billion (2023 est.)
Budget balance	€1.3 billion deficit (2024); −2.9% of GDP (2024);
Revenues	37.8% of GDP (2024)
Expenses	40.8% of GDP (2024)
Economic aid	€4.6 billion from European Structural and Investment Funds (2007–2013); €5.63 billion from European Structural and Investment Funds (2014–2020);
Credit rating	Standard & Poor's:; A (Domestic); A (Foreign); AAA (T&C Assessment); Outlook: Stable; Moody's:; A3; Outlook: Stable; Fitch:; A−; Outlook: Stable; Scope:; A−; Outlook: Stable;
	All values, unless otherwise stated, are in US dollars.

The economy of Latvia is a developed mixed economy. Part of the European single market, the nation has an open trade policy and trades extensively. Latvia has been a member of the World Trade Organization (WTO) since 1999, a member of the European Union since 2004, a member of the Eurozone since 2014 and a member of the OECD since 2016. It is ranked the 14th in the world by the Ease of Doing Business Index compiled by the World Bank Group. According to the Human Development Report 2023-24 by the United Nations Development Programme, Latvia has a HDI score of 0.879 (2022). Due to its geographical location, transit services are highly developed, along with timber and wood processing, agriculture and food products, as well as manufacturing of machinery and electronic devices.

Latvia's economy has had rapid GDP growth of more than 10% per year before it entered a severe recession in 2009 as a result of an unsustainable current account deficit, collapse of the real estate market, and large debt exposure amid the softening world economy. Triggered by the collapse of Parex Bank, the second largest bank, GDP decreased by almost 18% in 2009, and the European Union, the International Monetary Fund, and other international donors provided substantial financial assistance to Latvia as part of an agreement to defend the currency's peg to the euro in exchange for the government's commitment to stringent austerity measures. In 2011 Latvia achieved GDP growth by 5.5% and thus was again among the fastest growing economies in the European Union. The IMF/EU program successfully concluded in December 2011.

Privatization is mostly complete, except for some of the large state-owned utilities. Export growth contributed to the economic recovery, however, the bulk of the country's economic activity is in the services sector.