Latvia

The Latvian economy has been registering good results for several years. The activity slackened in 2005 : the GDP growth rate reaching 8.5% in 2004 and 7.8% in 2005. The IMF forecasts a 6.8% growth in 2006. This good performance is mainly due to consumption and investment's sustained pace. Furthermore, Latvia became a member of the EU on the 1st of May 2004 and now benefits from European subsidies: 1.8 billion euros will be granted between 2004 and 2008. The country enjoys a skilled and cheap workforce. The sizeable deficit of its balance of payments and the huge external debt are the economy's major weaknesses. Latvia remains the poorest country among EU's new members.

The agriculture sector is dominated by breeding. Appart from wood which production is largely exported, Latvia has almost no natural resources. The country has to import all its energy products, especially from Russia. The Latvian economy is driven by services sector which provides 71% of the GDP. Oil in transit between Europe and Russia is one of the main activity sector. Building, metallurgy and mechanic engineering are booming sectors.

The Latvian market is open and competitive. The European Union is Latvia's largest trade partner. Foreign direct investments are favoured by a profitable tax system.
Its top three export partners are the United Kingdom, Germany and Sweden.
Latvia's top three import partners are Germany, Lithuania and Russia. The country mainly imports machinery, hydrocarbons, capital and transport goods and other manufactured products.