<hdr>The World Factbook 1994: Latvia<nl>Economy</hdr><body>
<list>
<item><hi format=bold>Overview:</hi> Latvia is rapidly becoming a dynamic market economy, rivaled only by Estonia among the former Soviet states in the speed of its transformation. The transition has been painful with GDP falling over 45% in 1992-93, according to official statistics, and industrial production experiencing even steeper declines. Nevertheless, the government's tough monetary policies and reform program, which foster the development of the private sector and market mechanisms, have kept inflation low, created a dynamic private sector—much of which is not captured in official statistics—and expanded trade ties with the West. Much of agriculture is already privatized and the government plans to step up the pace of privatization of state enterprises. The economy is now poised for recovery and will benefit from the country's strategic location on the Baltic Sea, its well-educated population, and its diverse—albeit largely obsolete—industrial structure.
<item><hi format=bold>National product:</hi> GDP—purchasing power equivalent—$13.2 billion (1993 estimate from the UN International Comparison Program, as extended to 1991 and published in the World Bank's World Development Report 1993; and as extrapolated to 1993 using official Latvian statistics, which are very uncertain because of major economic changes since 1990)
<item><hi format=bold>National product real growth rate:</hi> -5% (1993 est.)
<item><hi format=bold>National product per capita:</hi> $4,810 (1993 est.)
<item><hi format=bold>Inflation rate (consumer prices):</hi> 2% per month (1993 average)
<item>• <hi format=ital>consumption per capita:</hi> 2,125 kWh (1992)
</list>
<item><hi format=bold>Industries:</hi> employs 41% of labor force; highly diversified; dependent on imports for energy, raw materials, and intermediate products; produces buses, vans, street and railroad cars, synthetic fibers, agricultural machinery, fertilizers, washing machines, radios, electronics, pharmaceuticals, processed foods, textiles
<item><hi format=bold>Agriculture:</hi> employs 16% of labor force; principally dairy farming and livestock feeding; products—meat, milk, eggs, grain, sugar beets, potatoes, vegetables; fishing and fish packing
<item><hi format=bold>Illicit drugs:</hi> transshipment point for illicit drugs from Central and Southwest Asia and Latin America to Western Europe; limited producer of illicit opium; mostly for domestic consumption; also produces illicit amphetamines for export
<item><hi format=bold>Economic aid:</hi> $NA
<item><hi format=bold>Currency:</hi> 1 lat=100 cents; introduced NA March 1993
