Latvia

Country @rating: A3

Speculative Grade

An unsteady political and economic environment is likely to affect further an already poor payment record.

Form of government	Parliamentary democracy
Administrative organisation	4 regions
Area	64,589 km²
Population	2.321,000, density: 36 inhabitants / km²
Official language	Latvian
Local currency	1 Latvian Lats (LVL) = 100 Santims
Capital	Riga – 765,000 inhabitants
Major cities / population	Daugavpils	113,000
	Liepaja	87,000
	Jelgava	66,000
	Jurmala	55,000
	Ventspils	44,000
	Rezekne	39,000


Ethnic groups	57.6% Latvian, 29.6% Russian, 4.1% Belarus, 2.7% Ukrainian, 2.5% Pole, 1.4% Lithuanian, 2.1% other
Religion	55% Lutheran, 24% Catholic, 9% Russian Orthodox
Natural resources	Wood, peat, limestone, dolomite
Membership in international organisations	OSCE, UN, UNESCO, WTO, IMF, OIE, OSShD, IUR, UPU, Council of Europe, World Bank, EU, NATO, ...

Major Macro Economic Indicators

Key Data (in million EUR)

2003

2004

2005

2006

2007*

2008*

GDP (real in %)

7.2

8.6

8.3

10.3

8.0

8.0

Consumer price (%)

2.9

6.2

6.7

6.5

5.6

5.3

Gross fixed capital formation
(real in %)

10.9

17.3

14.0

12.0

10.0

n.a.

Unemployment (%)

10.6

10.5

8.7

7.4

7.2

5.7

Budget deficit (in % of GDP)

-1.2

-0.9

0.1

-1.0

-1.2

n.a.

Merchandise exports (million €)

3,200

4,200

5,300

6,700

8,300

n.a.

Merchandise imports (million €)

5,200

7,000

8,3600

10,200

12,000

n.a.

Current account (in % of GDP)

-8.1

-12.9

-12.4

-14.5

-12.7

-15.7

FDI (net inflow in % of GDP)

n.a.

n.a.

4.0

8.5

5.7

4.3

Gross foreign debt (in % of GDP)

79.1

92.7

100.7

103.2

106.2

124.9

* forecast
Source: Bank Austria Creditanstalt Konzernvolkswirtschaft, Latvijas Bank, Coface S.A.

Market Size

Indicators

Latvia

regional average

emerging countries average

GNP per capita (PPP dollars)

13,480

9,171

5,540

GNP per capita

6,760

4,834

2,117

Human development index

0.836

0.766

0.660

Wealthiest 10%
share of national income (%)

26

25

30

Urban population percentage

66

63

43

Percentage under 15 years old

15

20

29

Number of computers
per 1,000 inhabitants

217

95

48

Source: Coface, www.trading-safely.com

Development of the Latvian Lats vs. the Euro and US Dollar

Average Exchange Rate
2003 2004 2005 2006 2007*
2008*

LVL/EUR

0.7

0.7

0.7

0.7

0.7

0.7

LVL/USD

0.5

0.6

0.6

0.6

n.a.

n.a.

* forecast
Source: Bank Austria Creditanstalt Konzernvolkswirtschaft, Latvijas Bank

For additional information please contact:

Coface Central Europe Holding AG

Stubenring 24
1010 Vienna
AUSTRIA

T. +43 (1) 515 54 - 0
F. +43 (1) 533 56 05

E-mail: office@cofacecentraleurope.com

Key Data (in million EUR)	2003	2004	2005	2006	2007*	2008*
GDP (real in %)	7.2	8.6	8.3	10.3	8.0	8.0
Consumer price (%)	2.9	6.2	6.7	6.5	5.6	5.3
Gross fixed capital formation (real in %)	10.9	17.3	14.0	12.0	10.0	n.a.
Unemployment (%)	10.6	10.5	8.7	7.4	7.2	5.7
Budget deficit (in % of GDP)	-1.2	-0.9	0.1	-1.0	-1.2	n.a.
Merchandise exports (million €)	3,200	4,200	5,300	6,700	8,300	n.a.
Merchandise imports (million €)	5,200	7,000	8,3600	10,200	12,000	n.a.
Current account (in % of GDP)	-8.1	-12.9	-12.4	-14.5	-12.7	-15.7
FDI (net inflow in % of GDP)	n.a.	n.a.	4.0	8.5	5.7	4.3
Gross foreign debt (in % of GDP)	79.1	92.7	100.7	103.2	106.2	124.9
* forecast Source: Bank Austria Creditanstalt Konzernvolkswirtschaft, Latvijas Bank, Coface S.A.

Indicators	Latvia	regional average	emerging countries average
GNP per capita (PPP dollars)	13,480	9,171	5,540
GNP per capita	6,760	4,834	2,117
Human development index	0.836	0.766	0.660
Wealthiest 10% share of national income (%)	26	25	30
Urban population percentage	66	63	43
Percentage under 15 years old	15	20	29
Number of computers per 1,000 inhabitants	217	95	48
Source: Coface, www.trading-safely.com

Average Exchange Rate	2003	2004	2005	2006	2007*	2008*
LVL/EUR	0.7	0.7	0.7	0.7	0.7	0.7
LVL/USD	0.5	0.6	0.6	0.6	n.a.	n.a.
* forecast Source: Bank Austria Creditanstalt Konzernvolkswirtschaft, Latvijas Bank