Editing Latvia (section)

== Economy ==
{{Main|Economy of Latvia}}
[[File:BlueEurozone.svg|thumb|Latvia is part of the [[European single market]] (light blue), [[Eurozone]] (dark blue) and [[Schengen Area]] (not shown).]]
[[File:GDP_per_capita_Baltics.svg|thumb|right|Real GPD per capita development of Estonia, Latvia and Lithuania]]
Latvia is a member of the [[World Trade Organization]] (1999) and the [[European Union]] (2004). On 1 January 2014, the [[euro]] became the country's currency, superseding the [[Latvian lats|Lats]]. According to statistics in late 2013, 45% of the population supported the introduction of the euro, while 52% opposed it.<ref>{{cite web |author=Apollo, redakcija@apollo.lv |url=http://www.apollo.lv/zinas/turpina-pieaugt-iedzivotaju-atbalsts-eiro-ieviesanai/625128 |title=Turpina pieaugt iedzīvotāju atbalsts eiro ieviešanai |date=2 December 2013 |publisher=Apollo.lv |access-date=23 April 2014 |archive-url=https://web.archive.org/web/20140404152209/http://www.apollo.lv/zinas/turpina-pieaugt-iedzivotaju-atbalsts-eiro-ieviesanai/625128 |archive-date=4 April 2014 |url-status=live }}</ref> Following the introduction of the Euro, Eurobarometer surveys in January 2014 showed support for the euro to be around 53%, close to the European average.<ref>{{cite news |url=https://www.economist.com/news/europe/21593502-latvias-president-nominates-laimdota-straujuma-prime-minister-new-currency-new-leader |title=New currency, new leader |newspaper=The Economist |date=14 January 2014 |access-date=10 January 2014 |archive-url=https://web.archive.org/web/20170701155225/http://www.economist.com/news/europe/21593502-latvias-president-nominates-laimdota-straujuma-prime-minister-new-currency-new-leader |archive-date=1 July 2017 |url-status=live }}</ref>

Since the year 2000, Latvia has had one of the highest (GDP) growth rates in Europe.<ref>{{cite web|url=http://epp.eurostat.ec.europa.eu/portal/page?_pageid=1996,39140985&_dad=portal&_schema=PORTAL&screen=detailref&language=en&product=sdi_ed&root=sdi_ed/sdi_ed/sdi_ed1000 |title=Growth rate of real GDP per capita |publisher=[[Eurostat]] |access-date=28 July 2007 |archive-url=https://web.archive.org/web/20071012010738/http://epp.eurostat.ec.europa.eu/portal/page?_pageid=1996%2C39140985&_dad=portal&_schema=PORTAL&screen=detailref&language=en&product=sdi_ed&root=sdi_ed%2Fsdi_ed%2Fsdi_ed1000 |archive-date=12 October 2007 }}</ref> However, the chiefly consumption-driven growth in Latvia resulted in the collapse of Latvian GDP in late 2008 and early 2009, exacerbated by the global economic crisis, shortage of credit and huge money resources used for the bailout of [[Parex Bank]].<ref>{{cite web|url=http://www.baltic-course.com/eng/finances/?doc=22011|title=Rimsevics: Failing to bail out Parex banka would result in closing down of four banks in Latvia|publisher=[[The Baltic Course]]|access-date=8 December 2013|archive-url=https://web.archive.org/web/20131212090529/http://www.baltic-course.com/eng/finances/?doc=22011|archive-date=12 December 2013}}</ref> The Latvian economy fell 18% in the first three months of 2009, the biggest fall in the European Union.<ref>{{cite news|author=Aaron Eglitis |url=https://www.bloomberg.com/apps/news?pid=newsarchive&sid=ao7qqF0UESqc |archive-url=https://web.archive.org/web/20101202141324/http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ao7qqF0UESqc |archive-date=2 December 2010 |title=Latvian GDP Shrank 18% in First Quarter, EU's Biggest Fall&nbsp;– |publisher=Bloomberg L.P. |date=11 May 2009 |access-date=16 October 2010}}</ref><ref>{{cite news |url=http://news.bbc.co.uk/2/hi/business/8043972.stm |work=BBC News |title=Latvian economy in rapid decline |date=11 May 2009 | access-date=4 April 2010 | archive-url=https://web.archive.org/web/20090930090503/http://news.bbc.co.uk/2/hi/business/8043972.stm | archive-date=30 September 2009 | url-status=live }}</ref>

The economic crisis of 2009 proved earlier assumptions that the fast-growing economy was heading for implosion of the [[economic bubble]], because it was driven mainly by growth of domestic [[consumption (economics)|consumption]], financed by a serious increase of private [[debt]], as well as a negative foreign [[balance of trade|trade balance]]. The prices of real estate, which rose 150% from 2004 to 2006, was a significant contributor to the economic bubble.<ref>{{Cite web |title=A bubble burst: the downfall of Latvian real estate |url=https://www.baltictimes.com/news/articles/22120/ |access-date=6 April 2022 |website=[[baltictimes.com]] |archive-date=17 July 2022 |archive-url=https://web.archive.org/web/20220717111847/https://www.baltictimes.com/news/articles/22120/ |url-status=live }}</ref>

[[Privatisation]] in Latvia is almost complete. Virtually all of the previously state-owned small and medium companies have been privatised, leaving only a small number of politically sensitive large state companies. The private sector accounted for 70% of the country's GDP in 2006. 
<ref>{{Cite journal |last=Commercio |first=Michele E. |date=1 March 2008 |title=Systems of Partial Control: Ethnic Dynamics in Post-Soviet Estonia and Latvia |journal=Studies in Comparative International Development |language=en |volume=43 |issue=1 |pages=81–100 |doi=10.1007/s12116-007-9013-5 |s2cid=26143200 |issn=1936-6167}}</ref>

Foreign investment in Latvia is still modest compared with the levels in north-central Europe. A law expanding the scope for selling land, including to foreigners, was passed in 1997. Representing 10.2% of Latvia's total foreign direct investment, American companies invested $127 million in 1999. In the same year, the United States of America exported $58.2 million of goods and services to Latvia and imported $87.9 million. Eager to join Western economic institutions like the [[World Trade Organization]], [[Organisation for Economic Co-operation and Development|OECD]], and the [[European Union]], Latvia signed a Europe Agreement with the EU in 1995—with a 4-year transition period. Latvia and the United States have signed treaties on investment, trade, and intellectual property protection and avoidance of double taxation.<ref>{{cite web|url=https://www.irs.gov/pub/irs-trty/latvia.pdf|title=TAX CONVENTION WITH LATVIA|publisher=Internal Revenue Service|access-date=19 May 2018|archive-url=https://web.archive.org/web/20170505121156/https://www.irs.gov/pub/irs-trty/latvia.pdf|archive-date=5 May 2017|url-status=live}}</ref><ref>{{cite web|url=http://www.wipo.int/wipolex/en/other_treaties/text.jsp?file_id=241419|title=Agreement between the United States of America and the Republic of Latvia on Trade Relations and Intellectual Property Rights Protection|publisher=World Intellectual Property Organization|access-date=19 May 2018|archive-url=https://web.archive.org/web/20180520053732/http://www.wipo.int/wipolex/en/other_treaties/text.jsp?file_id=241419|archive-date=20 May 2018|url-status=live}}</ref>

In 2010, Latvia launched a Residence by Investment program (Golden Visa) in order to attract foreign investors and make local economy benefit from it. This program allows investors to get a Latvian residence permit by investing at least €250,000 in property or in an enterprise with at least 50 employees and an annual turnover of at least €10M.{{citation needed|date=August 2024}}

; Economic contraction and recovery (2008–12)
{{Main|2008–2010 Latvian financial crisis}}
[[File:AirBaltic Boeing 757-200 at RIX.jpg|thumb|An [[airBaltic]] Boeing 757−200WL takes off at [[Riga International Airport]] (RIX).]]
The Latvian economy entered a phase of fiscal contraction during the second half of 2008 after an extended period of credit-based speculation and unrealistic appreciation in real estate values. The national account deficit for 2007, for example, represented more than 22% of the GDP for the year while inflation was running at 10%.<ref name=cia>{{cite web|url=https://www.cia.gov/the-world-factbook/countries/latvia/|title=Latvia|publisher=[[Central Intelligence Agency|CIA]]|access-date=15 December 2008|archive-date=2 July 2021|archive-url=https://web.archive.org/web/20210702003142/https://www.cia.gov/the-world-factbook/countries/latvia/|url-status=live}}</ref>

Latvia's unemployment rate rose sharply in this period from a low of 5.4% in November 2007 to over 22%.<ref>{{cite web |url=http://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=132.STS.M.lv.S.UNEH.RTT000.4.000 |title=Statistical Office of the European Commission (Eurostat), Monthly Bulletin: Table in chapter 09, section 01 |publisher=Europa (web portal) |date=1 October 2010 |access-date=16 October 2010 |archive-url=https://web.archive.org/web/20110720162221/http://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=132.STS.M.lv.S.UNEH.RTT000.4.000 |archive-date=20 July 2011 }}</ref> In April 2010 Latvia had the highest unemployment rate in the EU, at 22.5%, ahead of Spain, which had 19.7%.<ref>{{cite web |url=http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&language=en&pcode=teilm020&tableSelection=1&plugin=1 |title=Eurostat&nbsp;– Tables, Graphs and Maps Interface (TGM) table |publisher=European Commission |access-date=12 August 2010 |archive-url=https://web.archive.org/web/20141101202312/http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&language=en&pcode=teilm020&tableSelection=1&plugin=1 |archive-date=1 November 2014 |url-status=live }}</ref>

[[Paul Krugman]], the Nobel Laureate in economics for 2008, wrote in his [[The New York Times|New York Times]] Op-Ed column on 15 December 2008:

<blockquote>The most acute problems are on Europe's periphery, where many smaller economies are experiencing crises strongly reminiscent of past crises in Latin America and Asia: Latvia is the new Argentina<ref>{{cite news |url=https://www.nytimes.com/2008/12/15/opinion/15krugman.html |title=European Crass Warfare |work=The New York Times |access-date=15 December 2008 |author=Paul Krugman |date=15 December 2008 |archive-url=https://web.archive.org/web/20190428155332/https://www.nytimes.com/2008/12/15/opinion/15krugman.html |archive-date=28 April 2019 |url-status=live }}</ref></blockquote>

However, by 2010, commentators<ref name="economist">"Baltic Thaw, Aegean freeze", The Economist, 27 February 2010, p59</ref><ref>Patrick Lannin and Aija Braslina [http://www.finanznachrichten.de/nachrichten-2010-03/16380370-update-2-imf-hails-latvia-effort-but-sees-risks-ahead-020.htm "UPDATE 2-IMF hails Latvia effort but sees risks ahead"] {{Webarchive|url=https://web.archive.org/web/20120111215610/http://www.finanznachrichten.de/nachrichten-2010-03/16380370-update-2-imf-hails-latvia-effort-but-sees-risks-ahead-020.htm |date=11 January 2012 }}. Reuters, 15 March 2010. Retrieved 31 July 2010</ref> noted signs of stabilisation in the Latvian economy. Rating agency [[Standard & Poor's]] raised its outlook on Latvia's debt from negative to stable.<ref name="economist" /> Latvia's current account, which had been in deficit by 27% in late 2006 was in surplus in February 2010.<ref name="economist" /> Kenneth Orchard, senior analyst at [[Moody's Investors Service]] argued that:

<blockquote>The strengthening regional economy is supporting Latvian production and exports, while the sharp swing in the current account balance suggests that the country's 'internal devaluation' is working.<ref>{{cite web |author=Toomas Hõbemägi |url=http://www.bbn.ee/article/2010/02/08/Moody_s_Latvian_economy_is_stabilizing |title=Baltic Business News, 8 February 2010 |publisher=Bbn.ee |access-date=16 October 2010 |archive-url=https://web.archive.org/web/20160306025950/http://bbn.ee/article/2010/02/08/moody_s_latvian_economy_is_stabilizing |archive-date=6 March 2016 }}</ref></blockquote>

The [[IMF]] concluded the First Post-Program Monitoring Discussions with the Republic of Latvia in July 2012 announcing that Latvia's economy has been recovering strongly since 2010, following the deep downturn in 2008–09. Real GDP growth of 5.5 percent in 2011 was underpinned by export growth and a recovery in domestic demand. The growth momentum has continued into 2012 and 2013 despite deteriorating external conditions, and the economy is expected to expand by 4.1 percent in 2014. The unemployment rate has receded from its peak of more than 20 percent in 2010 to around 9.3 percent in 2014.<ref>{{cite web |author=Public Information Notice (PIN) No. 12/76 by IMF |url=http://www.imf.org/external/np/sec/pn/2012/pn1276.htm |title=IMF Executive Board Concludes First Post-Program Monitoring Discussions with the Republic of Latvia, July 16, 2012 |publisher=imf.org |access-date=18 July 2012 |archive-url=https://web.archive.org/web/20120817001526/http://www.imf.org/external/np/sec/pn/2012/pn1276.htm |archive-date=17 August 2012 |url-status=live }}</ref>

; Economic recovery
GDP at current prices rose from €23.7 billion in 2014 to €30.5 billion in 2019. The employment rate rose in the same period from 59.1% to 65% with unemployment falling from 10.8% to 6.5%.<ref>{{cite web |title=MACROECONOMIC REVIEW OF LATVIA |url=https://www.em.gov.lv/en/media/1477/download#:~:text=Until%202019%2C%20Latvia%27s%20economic%20growth,%25%20and%204.3%25%2C%20respectively. |date=April 2020 |access-date=26 October 2023 |archive-date=26 October 2023 |archive-url=https://web.archive.org/web/20231026223644/https://www.em.gov.lv/en/media/1477/download#:~:text=Until%202019%2C%20Latvia%27s%20economic%20growth,%25%20and%204.3%25%2C%20respectively. |url-status=live }}</ref>

=== Infrastructure ===
==== Transport ====
[[File:Ventspils osta.jpg|thumb|The [[Free port of Ventspils|Port of Ventspils]] is one of the busiest ports in the [[Baltic states]].]]
{{Main|Transport in Latvia}}
The transport sector is around 14% of GDP. Transit between Russia, Belarus, Kazakhstan as well as other Asian countries and the West used to be large.<ref name="wpt">{{cite web|url=http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/ECAEXT/EXTECAREGTOPTRANSPORT/0,,contentMDK:20647605~pagePK:34004173~piPK:34003707~theSitePK:571121,00.html |title=Latvia |access-date=8 September 2008 |archive-url=https://web.archive.org/web/20080908042001/http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/ECAEXT/EXTECAREGTOPTRANSPORT/0%2C%2CcontentMDK%3A20647605~pagePK%3A34004173~piPK%3A34003707~theSitePK%3A571121%2C00.html |archive-date= 8 September 2008}}, World Bank</ref>

The four biggest ports of Latvia are located in [[Riga]], [[Ventspils]], [[Liepāja]] and [[Saulkrasti|Skulte]]. Most transit traffic uses these and half the cargo is crude oil and oil products.<ref name="wpt" /> [[Free port of Ventspils]] is one of the busiest ports in the [[Baltic states]]. Apart from road and railway connections, Ventspils is also linked to oil extraction fields and prior to 2022, transportation routes of Russian Federation via system of two pipelines from [[Polotsk]], Belarus.{{citation needed|date=March 2015}}

[[Riga International Airport]] is the busiest airport in the [[Baltic states]] with 7.8 million passengers in 2019. It has direct flight to over 80 destinations in 30 countries. The only other airport handling regular commercial flights is [[Liepāja International Airport]].
[[airBaltic]] is the Latvian flag carrier airline and a low-cost carrier with hubs in all three [[Baltic States]], but main base in [[Riga]], Latvia.<ref>{{Cite web|title=Basic company information {{!}} airBaltic|url=https://www.airbaltic.com/en/basic-company-information|access-date=2 December 2020|website=www.airbaltic.com|language=en-US|archive-date=25 February 2023|archive-url=https://web.archive.org/web/20230225141645/https://www.airbaltic.com/en/basic-company-information|url-status=live}}</ref>

[[Latvian Railways|Latvian Railway]]'s main network consists of 1,860&nbsp;km of which 1,826&nbsp;km is 1,520&nbsp;mm [[Russian gauge]] railway of which 251&nbsp;km are electrified, making it the longest railway network in the [[Baltic States]]. Latvia's railway network is currently incompatible with European [[standard gauge]] lines.<ref>{{cite web |url=http://data.csb.gov.lv/pxweb/lv/transp/transp__ikgad__transp/TR0010.px/table/tableViewLayout2/?rxid=cdcb978c-22b0-416a-aacc-aa650d3e2ce0 |title=Satiksmes ceļu garums gada beigās (kilometros) |publisher=Centrālais Statistikas Birojs |access-date=7 March 2018 }}{{dead link|date=August 2019 |bot=InternetArchiveBot |fix-attempted=yes }}</ref> However, [[Rail Baltica]] railway, linking Helsinki-Tallinn-Riga-Kaunas-Warsaw is under construction and is set to be completed in 2026.<ref>{{cite web |url=http://www.railbaltica.org/about-rail-baltica/ |title=About Rail Baltica |publisher=Rail Baltica |access-date=7 March 2018 |archive-url=https://web.archive.org/web/20180312171052/http://www.railbaltica.org/about-rail-baltica/ |archive-date=12 March 2018 }}</ref>

National road network in Latvia totals 1675&nbsp;km of main roads, 5473&nbsp;km of regional roads and 13 064&nbsp;km of local roads. Municipal roads in Latvia totals 30 439&nbsp;km of roads and 8039&nbsp;km of streets.<ref>{{cite web|url=https://lvceli.lv/informacija-un-dati/#celu-klasifikacija|title=Ceļu klasifikācija|work=Latvijas Valsts ceļi |access-date=7 March 2018|archive-url=https://web.archive.org/web/20180826150423/https://lvceli.lv/informacija-un-dati/#celu-klasifikacija|archive-date=26 August 2018}}</ref> The best known roads are [[Via Baltica|A1]] ([[European route E67]]), connecting [[Warsaw]] and [[Tallinn]], as well as [[European route E22]], connecting [[Ventspils]] and [[Terehova, Latvia|Terehova]]. In 2017 there were a total of 803,546 licensed vehicles in Latvia.<ref>{{cite web |url=https://data.stat.gov.lv/pxweb/lv/OSP_OD/OSP_OD__transp__auto_celi/TR010c.px/ |title=Reģistrēto automobiļu skaits ceturkšņa beigās |publisher=Centrālais Statistikas Birojs |access-date=7 March 2021 |archive-date=9 April 2022 |archive-url=https://web.archive.org/web/20220409053119/https://data.stat.gov.lv/pxweb/lv/OSP_OD/OSP_OD__transp__auto_celi/TR010c.px/ |url-status=dead }}</ref>

==== Energy ====
{{main|Energy in Latvia}}

Latvia has three large hydroelectric power stations in [[Pļaviņu HES]] (908 MW), [[Rīgas HES]] (402 MW) and [[Ķeguma HES-2]] (248 MW).<ref>{{cite web |title=Daugava hydropower plants |url=https://latvenergo.lv/en/par-mums/razosana |website=Latvenergo.lv |access-date=9 September 2022 |archive-date=9 September 2022 |archive-url=https://web.archive.org/web/20220909200249/https://latvenergo.lv/en/par-mums/razosana |url-status=live }}</ref> In recent years a couple of dozen of wind farms as well as biogas or biomass power stations of different scale have been built in Latvia.<ref>{{cite web |title=Development of wind parks is possible in whole Latvia's territory - LVM |url=https://www.baltictimes.com/development_of_wind_parks_is_possible_in_whole_latvia_s_territory_-_lvm/ |website=The Baltic Times |access-date=9 September 2022 |archive-date=9 September 2022 |archive-url=https://web.archive.org/web/20220909201127/https://www.baltictimes.com/development_of_wind_parks_is_possible_in_whole_latvia_s_territory_-_lvm/ |url-status=live }}</ref> In 2022, the Latvian Prime Minister announced about the planned investments of 1 billion euros in the new [[wind farm]]s and the completed project will expectedly provide additional 800 MW of capacity.<ref>{{cite web |title=Prime Minister: investment in wind farms to reach one billion euros |url=https://bnn-news.com/prime-minister-investment-in-wind-farms-to-reach-one-billion-euros-236830 |website=Baltic News Network |access-date=9 September 2022 |date=8 August 2022 |archive-date=9 September 2022 |archive-url=https://web.archive.org/web/20220909202258/https://bnn-news.com/prime-minister-investment-in-wind-farms-to-reach-one-billion-euros-236830 |url-status=live }}</ref>

Latvia operates ''Inčukalns underground gas storage facility'', one of the largest [[natural gas storage|underground gas storage facilities]] in Europe and the only one in the Baltic states. Unique geological conditions at Inčukalns and other locations in Latvia are particularly suitable for underground gas storage.<ref>{{cite web |url=http://www.unece.org/fileadmin/DAM/ie/se/pdfs/wpgas/session/17_countr/latvia.pdf |title=The Outlook of Latvian Potential Underground Gas Storages and Prospects of Utilization of this Potential for Securing of Reliable Gas Supply to Europe |publisher=UNECE |date=24 January 2007 |access-date=5 June 2013 |archive-url=https://web.archive.org/web/20130921055747/http://www.unece.org/fileadmin/DAM/ie/se/pdfs/wpgas/session/17_countr/latvia.pdf |archive-date=21 September 2013 |url-status=live }}</ref>