Remember earlier this year when Latvian blondes decided to hold a march to lift the spirits of Latvia and rescue its economy? It didn’t work.
RIGA, Latvia (AP) — Latvia’s economy shed 19 per cent of its value in the third quarter compared with a year earlier, the country’s statistics agency said Wednesday, highlighting the woes in the European Union’s worst economy.
Latvian Statistics said that the third quarter fall in gross domestic product was led by a severe drop in retail trade, down 28.7 per cent year-on-year, and construction, down 36 per cent.
From January to September Latvia, which is suffering its worst recession on record, saw its economy shrink a total 18.6 per cent, the agency said.
The Baltic state is undergoing a drastic correction after four years of stellar growth that followed the country’s membership to the EU. In 2006 the economy grew a dizzying 12.2 per cent.
In the past year, however, Latvia’s government has been forced to slash expenditures, raise taxes, and sign onto an emergency bailout loan worth euro7.5 billion ($11 billion) with international lenders in order to prevent bankruptcy.
Unemployment, meanwhile, continues to climb, and last week Eurostat, the EU’s statistics agency, said Latvia has the highest rate of joblessness in the bloc, at 20.9 per cent.
Government officials and economists have said the economy would hit the lowest point sometime this winter, with economic growth likely to resume in 2011.
Latvia’s GDP is expected to fall approximately 18 per cent this year, and another 4 per cent in 2010.