The economy of Latvia is an open economy in Northern Europe and is part of the European Union's (EU) single market. Latvia is a member of the World Trade Organization (WTO) since 1999, and a member of the European Union since 2004. Latvia is ranked the 21st in the world by the Ease of Doing Business Index prepared by the World Bank Group, According to the Human Development Report 2011, Latvia belongs to the group of very high human development countries. 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.
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 by almost 18% in 2009, and the European Union, the International Monetary Fund, 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. In 2011 Latvian GDP grew again by 5.5% and thus Latvia was among the fastest growing economies in the European Union. The IMF/EU program successfully concluded in December 2011.
Privatization is mostly complete, except for some of the large state-owned utilities. Export growth contributed to the economic recovery, however the bulk of the country's economic activity is in the services sector.
Read more about Economy Of Latvia: Economic History, Privatisation, Energy, Statistics
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