The Latvian Lat (LVL) is the official currency of Latvia. The Lat was first introduced in 1922 when it replaced the Latvian ruble; however when Latvia became a part of the USSR in 1940, the USSR ruble replaced the Lat. A reversion to the Lat as the official currency took place in 1993, when Latvia regained its independence. It has been recently speculated that Latvia will adopt the Euro sometime around the year 2008.
| Moody's Rating |
| A2 |
| S&P Rating |
| A |
|
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Political Structure
Latvia is a parliamentary government with consisting of three branches: executive, legislative, and judicial. The president, prime minister, and the cabinet form the executive branch of the government. The legislative branch consists of a unicameral parliament with 100 seats and members elected by direct, popular vote to serve four-year terms. The judicial branch is a supreme court with judges appointed by the parliament.
Prominent Figures
The president of Latvia, President Vaira Vike-Freiberga, has been in office since July 8, 1999. The Bank of Latvia is the central bank of the country, and is led by Chairman Mara Raubisko.
Unique Characteristics
All of the small and medium-sized state owned companies have been privatized. Because of the efforts towards privatization, the private sector has developed prosperously. This development of the private sector accounted for 70% of GDP in 2003. Latvia's exports consist mostly of wood and wood products. The major export countries are located predominantly in the European Union.
Key Economic Factors
Economic Overview: Latvia's transitional economy recovered from the 1998 Russian financial crisis in large part due to the government's strictness with budgeting, and a reorientation of exports toward EU countries (which in turn lessened Latvia's trade dependency on Russia). The majority of companies, banks, and real estate have been privatized, although the state still holds sizable stakes in a few large enterprises. Latvia officially joined the World Trade Organization (WTO) in February 1999, and among its top foreign policy goals is preparing for EU membership. The current account and internal government deficits continue to prove major economic concerns, but efforts to increase efficiency in revenue collection may diminish the budget deficit.
Industries: Buses, vans, street and railroad cars, synthetic fibers, agricultural machinery, fertilizers, washing machines, radios, electronics, pharmaceuticals, processed foods, and textiles.
Agricultural Products: Grain, sugar beets, potatoes, vegetables, beef, pork, milk, eggs and fish.
Import Commodities: Machinery and equipment, chemicals, fuels and vehicles.
Export Commodities: Wood (products), machinery, equipment, metals, textiles, and foodstuffs.
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