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Several eastern Baltic tribes merged in medieval times to form the ethnic core of the Latvian people (ca. 8th-12th centuries A.D.). The region subsequently came under the control of Germans, Poles, Swedes, and finally, Russians. A Latvian republic emerged following World War I, but it was annexed by the USSR in 1940 - an action never recognized by the US and many other countries. Latvia reestablished its independence in 1991 following the breakup of the Soviet Union. Although the last Russian troops left in 1994, the status of the Russian minority (some 26% of the population) remains of concern to Moscow. Latvia acceded to both NATO and the EU in the spring of 2004; it joined the euro zone in 2014 and the OECD in 2016. A dual citizenship law was adopted in 2013, easing naturalization for non-citizen children.


Eastern Europe, bordering the Baltic Sea, between Estonia and Lithuania

Natural Resources

peat, limestone, dolomite, amber, hydropower, timber, arable land

Population - distribution

largest concentration of people is found in and around the port and capital city of Riga; small agglomerations are scattered throughout the country

Latvian (official) 56.3%, Russian 33.8%, other 0.6% (includes Polish, Ukrainian, and Belarusian), unspecified 9.4%
RIGA (capital) 621,000 (2015)
Conventional long form
Republic of Latvia
Conventional short form
Local long form
Latvijas Republika
Local short form
parliamentary republic
Geographic coordinates
56 57 N, 24 06 E
Time difference
UTC+2 (7 hours ahead of Washington, DC, during Standard Time)
Daylight saving time
+1hr, begins last Sunday in March; ends last Sunday in October
has not submitted an ICJ jurisdiction declaration; accepts ICCt jurisdiction
Latvia is a small, open economy with exports contributing more than half of 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 electronics industries. 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.
External debt stocks
US$ 38,255,247,000
Total tax rate (% of commercial profits)
Real Interest Rate
Manufacturing, value added (% of GDP)
Current Account Balance
US$ 403,142,455
Labor Force, Total
Employment in Agriculture
Employment in Industry
Employment in Services
Unemployment Rate
Imports of goods and services
US$ 15,898,798,128
Exports of goods and services
US$ 16,050,146,229
Total Merchandise Trade
FDI, net inflows
US$ 177,856,565
Commercial Service Exports
US$ 4,649,407,805
grain, rapeseed, potatoes, vegetables; pork, poultry, milk, eggs; fish
processed foods, processed wood products, textiles, processed metals, pharmaceuticals, railroad cars, synthetic fibers, electronics
foodstuffs, wood and wood products, metals, machinery and equipment, textiles
Lithuania 17.8%, Russia 11.4%, Estonia 11.1%, Germany 6.3%, Poland 5.6%, Sweden 5.1%, UK 5%, Denmark 4% (2015)
machinery and equipment, consumer goods, chemicals, fuels, vehicles
Lithuania 16.9%, Germany 11.3%, Poland 10.5%, Russia 8.2%, Estonia 7.8%, Finland 5.2%, Netherlands 4% (2015)
Country Risk Rating
Changes in generally good but somewhat volatile political and economic environment can affect corporate payment behavior. A basically secure business environment can nonetheless give rise to occasional difficulties for companies. Corporate default probability is quite acceptable on average.
Business Climate Rating
The business environment is relatively good. Although not always available, corporate financial information is usually reliable. Debt collection and the institutional framework may have some shortcomings. Intercompany transactions may run into occasional difficulties in the otherwise secure environments rated A3.
  • Advanced digitisation
  • Transit point between European Union and Russia
  • Membership of the Eurozone and OCED
  • Financial system dominated by Swedish banks (85% of domestic credit)
  • Legal reforms
  • Declining active population (low birth rate, emigration) and high rate of structural unemployment
  • Technological lag
  • Inadequate land links with the rest of the European Union
  • Wealth concentrated in the capital and significant inequalities in income
  • Spread of corruption
  • Heavy taxation of labor
  • Importance of bank deposits from non-residents
  • Declining competitiveness and profitability

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