The Baltic nation of Latvia is located across the Northern Europe. It shares its borders with Estonia (north), Lithuania (south), Russia (east) and Belarus (southeast). The country has a total geographical area of nearly 64,589 square km even while it has a temperate climate. The land of Latvia is rather fertile, and it has a good forest cover.
Over the years, majority of the banks, firms and real estate companies have undergone privatization in the country, and, by and large, privatization is complete in the country. This though does not include some of the large state-owned organizations. This is also not to suggest that there is no requirement to work towards controlling the budget crisis which is heading north in the country at an alarming speed.
On a positive note, Latvia boasts of one of the highest rates of the GDP growth across the European continent. But, this impressive growth was fueled by high consumption. The Financial Crisis of 2008 had thoroughly impacted, for the worse, the economy of the nation, mainly due to the easy credit facility offered. This later made the nation’s economy weak, and invited salary, unemployment and budget catastrophe.
No wonder, the nation registered the most unimpressive economic performance during the year of 2009, even as its yearly rate of growth averaged in the negative (−18%). Actually, its economy had suffered the most across the European Union (EU) of which Latvia had become a member during 2004.
At such a time, the International Monetary Fund (IMF) and EU came to Latvia’s rescue even while they bailed the nation out of a depressing situation, and they helped it reduce the fiscal deficit to 5% of its GDP.
There’s a silver lining though amidst all this. Latvia’s service sector has continued to be the most active player and contributor behind its national GDP, making-up for nearly 72.4% of its GDP. While the industry sector of the nation contributes close to 24% of its national GDP, its agriculture sector contributed with 3.6%.
During 2011, the GDP of the nation had increased by as much as 5.5%. Hence, Latvia had the fastest growing economies across the EU.
