The Economic Activity of Latvia
The country of Latvia has set a number of records in the history of Europe and even in the whole world because of its economy. Latvian economy has experienced a rollercoaster ride when they were once at the top and suddenly fell a painful downfall.
Latvia has joined the World Trade Organization in 1999 and the European Union in 2004. Since then, its economy has been experiencing gradual economic growth and development which have been very successful. In early 2008, it was named as the fastest developing economy in Europe which can be characterized by high wage increases (highest in Europe), low unemployment rate (10% rate), and low inflation rate (2.9% rate). However, due to the severe recession that struck the country together with the whole world, unemployment rate rapidly increased to 23% and serious economic problems have started to arise.
The severe recession in 2008 caused by large debt exposures and unmanageable account deficits brought down the country to its limit. In 2009, the country of Latvia has been included in the list of countries which experienced the worst economic declines. In this light, different organizations in which Latvia is a member of, other organizations who offer assistance, and certain countries who can afford to help despite the economic crisis has helped Latvia in bringing back its luster. The International Monetary Fund (IMF), the European Union (EU), and other donors have provided financial assistance to Latvia. Moreover, the government has also made economic reforms that helped the economy experience a boost such as the privatization of majority of the companies as well as banks. However, Latvenergo (Latvia’s main energy company) has remained a property of the state and they have no plans to privatize it.