Analytics, Economics, Good for Business, Latvia

The ministry has drawn up a report on the economic development of Latvia, which evaluates the economic situation in the country and analyzes future prospects.

The report indicates that since 2011, Latvia's economy was one of the fastest growing economies in the European Union (EU). Nevertheless, during the last several quarters, the growth rate has slightly decreased - in the first quarter of 2014, Latvia's gross domestic product increased 2.8 percent year-on-year. Although economic growth in the past several years was very impressive, the current GDP is still 9 percent lower than in 2007, before the crisis.

Since 2010, Latvia's export of products and services has been growing grown very fast, and is the main stimulus for economic development. The amount of export has exceeded the pre-crisis level by 20 percent. However, low demand on foreign markets in 2013 left an impact on export dynamics - the amount of export grew by 1 percent only. In the first quarter of 2014, Latvia's exports increased 2.3 percent year-on-year. The highest growth was observed in exports wood production, agriculture and food products.

The ministry emphasizes that the domestic market is going through positive changes as well. The level of employment is gradually growing and increasing wages have also contributed to higher private consumption.

The ministry forecasts that the employment level could increase 1.1 percent in 2014, while the unemployment level could be close to 10 percent.

"It is expected that in 2014, Latvia's export possibilities could slightly improve, as the economic situation in Latvia's trade partners is slowly stabilizing. At the same time, there is a strong uncertainty whether Latvia's economy will be affected by the Ukraine crisis," the ministry's report indicates.