Economic Turmoil in Latvia

In: Business and Management

Submitted By isish
Words 1512
Pages 7
Case Study 5

Economic Turmoil in Latvia

September 11, 2014

General Description and Central Issue of the Case
The Republic Latvia is a country of 24,938 square miles on the Baltic Sea, with 310 miles of shoreline. The country shares borders with Lithuania, Belarus, Estonia, and Russia. Latvia, Lithuania, and Belarus are three Baltic States that gained independence after the fall of the Soviet Union (Hill, 2013). Latvia declared independence on May 4, 1990. The population of Latvia is 2,165,165 with an ethnic makeup of Latvian 61.1%, Russian 26.2%, Belarusian 3.5%, Ukrainian 2.3%, Polish 2.2%, Lithuanian 1.3%, other 3.4% (CIA, 2014). Natural resources include peat, limestone, dolomite, amber, hydropower, timber, and arable land. Latvia is often too wet and in need of constant drainage. Approximately 3,953,686 acres of farmland or 85% of Latvia has been improved by drainage for agriculture. Latvia’s primary agricultural products are grain, rapeseed, potatoes, vegetable, pork, poultry, milk, eggs, and fish. Industry includes processed foods, processed wood products, textiles, processed metals, pharmaceuticals, railroad cars, synthetic fibers, and electronics (CIA, 2014).
The labor force sector that makes up Latvia’s GDP composition is 4.9% agriculture, 25.7% industry, and 69.4% services. Taxes make up 35.9% of Latvia’s GDP, with a public debt of 39.2%. The unemployment rate is 9.8%, and the industrial growth rate is 4.2%. Latvia has 10.9 billion in revenue and 10.95 billion in expenditures.
Last year Latvia exports were $12.67 billion, slightly up over 2012 $12.23 billion. Latvia exports food products, wood and wood products, metals, machinery and equipment, and textiles, with export partners Russia 18.2%, Lithuania 14.9%, Estonia 12.1%, Germany 7.5%, Poland 5.6% and Sweden 4.8%. Imports for last year were $15.56 billion, up over 2012 total…...

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