Latvia is a small, open economy with exports contributing significantly to its GDP. Due to its geographical location, transit services are highly-developed, along with timber and wood-processing, agriculture and food products, and manufacturing of machinery and electronic devices. Export growth contributed to the economic recovery, however the bulk of the country's economic activity is in the services sector. Corruption continues to be an impediment to attracting foreign direct investment and Latvia''s low birth rate and decreasing population are major challenges to its long-term economic vitality. Latvia''s economy experienced GDP growth of more than 10% per year during 2006-07, but entered a severe recession in 2008 as a result of an unsustainable current account deficit and large debt exposure amid the softening world economy. Triggered by the collapse of the second largest bank, GDP plunged 18% in 2009. A rebound in the export sector contributed to the economy''s first real quarterly GDP growth in over two years (2.9%) in the third quarter of 2010. The IMF, EU, 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. The IMF/EU program successfully concluded in December 2011. The government of Prime Minister Valdis DOMBROVSKIS reduced the fiscal deficit to 7.7% of GDP in 2010, and to 4% of GDP in 2011. Riga plans to reduce the budget deficit to less than 3% of GDP in 2012 in order to meet its goal of joining the euro zone in 2014. The majority of companies, banks, and real estate have been privatized, although the state still holds sizable stakes in a few large enterprises, including 99.8% ownership of the Latvian national airline. Latvia officially joined the World Trade Organization in February, 1999 and the EU in May 2004.

Data cover general government debt, and includes debt instruments issued (or owned) by government entities, including sub-sectors of central government, state government, local government, and social security funds

$8.009 billion (31 December 2011 est.)

$7.186 billion (31 December 2010 est.)

$12.24 billion (31 December 2011 est.)

$12.28 billion (31 December 2010 est.)

$27.15 billion (31 December 2011 est.)

$26.03 billion (31 December 2010 est.)

$1.076 billion (31 December 2011)

$1.252 billion (31 December 2010)

$1.824 billion (31 December 2009)

Grain, rapeseed, potatoes, vegetables; pork, poultry, milk, eggs; fish

Processed foods, processed wood products, textiles, processed metals, pharmaceuticals, railroad cars, synthetic fibers, electronics

Food products, wood and wood products, metals, machinery and equipment, textiles

Russia 17.7%, Lithuania 16.5%, Estonia 12.9%, Germany 7.9%, Sweden 5.6%, Poland 5.5% (2011)

Machinery and equipment, consumer goods, chemicals, fuels, vehicles

Lithuania 17.8%, Germany 11.8%, Russia 8.4%, Poland 7.5%, Estonia 7.1%, Finland 4.5%, Italy 4.3% (2011)

$6.383 billion (31 December 2011 est.)

$7.606 billion (31 December 2010 est.)

$38.37 billion (31 December 2011 est.)

$39.56 billion (31 December 2010 est.)

$13.56 billion (31 December 2011 est.)

$12 billion (31 December 2010 est.)

$1.108 billion (31 December 2011 est.)

$1.017 billion (31 December 2010 est.)