Flag of Latvia>

Economy and Banking Sector of Latvia

National Currency

Euro (EUR)

Latvia joined the Euro Area on 1 January 2014. The preceding national currency, Latvian lat (LVL), was replaced by Euro.

GDP

Nominal GDP (2019)
30.5 bln EUR  (+0.03%)
Nominal GDP per Capita (2019)
15,930 EUR  (+0.04%)
Real GDP Growth (2019)
2.2 %  (2018: 4.8 %)

According to Eurostat, nominal GDP of Latvia in 2019 was 30.5 bln EUR.

Latvia outperforms the European Union in terms of real GDP growth with the average annual differential coming to 1.2% over the past 10 years (2009 - 2019). In 2019 real GDP growth was 2.2% which was above the Euro Area average (1.2%) and above the European Union average (1.5%). Real GDP growth in 2020 - 2024 are IMF's estimates.

Real GDP Growth in Latvia.

Chart 1. Real GDP Growth in Latvia. Source: Eurostat, International Monetary Fund.

In 2019, nominal GDP per capita in Latvia was 15,930 EUR.

Latvia has a below-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, fell behind that of the European Union by -26.8% over the past 10 years (2008 - 2018). GDP per capita at PPP in 2019 - 2024 are IMF's estimates.

GDP Per Capita at Purchasing Power Parity in  Latvia; European Union = 100.

Chart 2. GDP Per Capita at Purchasing Power Parity in Latvia; European Union = 100.

Inflation Rate

CPI, MoM (May 2020)
-0.3 %  (Apr 2020: -0.5 %)
CPI, YoY (May 2020)
-0.9 %  (Apr 2020: -0.1 %)
CPI, Year Average (2019)
2.7 %  (2018: 2.6 %)

According to Eurostat, inflation rate in Latvia in 2019 expressed as annual percentages of average consumer prices was 2.7% which was above the Euro Area average (1.2%) and above the European Union average (1.5%). Inflation rates in 2020 - 2024 are IMF's estimates.

Inflation Rate in Latvia.

Chart 3. Inflation Rate in Latvia. Source: Eurostat, International Monetary Fund.

Unemployment Rate

Unemployment Rate (2019)
6.3 %  (2018: 7.4 %)

According to Eurostat, unemployment rate in Latvia in 2019 was 6.3% which was below the Euro Area average (7.6%) and equal to the European Union average (6.3%). Unemployment rates in 2020 - 2024 are IMF's estimates.

Unemployment Rate in Latvia.

Chart 4. Unemployment Rate in Latvia. Source: Eurostat, International Monetary Fund.

Government Bond Yield

Government Bond Yield (Apr 2020)
0.30 %  (Mar 2020: -0.06 %)

According to Eurostat, government bond yield in Latvia in April 2020 was 0.30%, compared to -0.06% in March 2020.

Government bond yield of Latvia.

Chart 5. Government bond yield of Latvia. Source: Eurostat.

Credit Ratings (as of Jul 2020)

Fitch
A- (high credit quality), outlook negative
Moody's
A3 (upper medium grade), outlook stable
Scope
A- (upper medium grade), outlook stable

Latvia has sovereign credit ratings assigned by American credit rating agencies Fitch and Moody's: the rating set by Fitch is A- (high credit quality), outlook negative; the rating set by Moody's is A3 (upper medium grade), outlook stable. Scope Ratings, the European rating agency, rated Latvia as A- (upper medium grade), outlook stable.

Fitch and Moody's rating data are provided for June 2020, Scope Ratings for July 2020.