Latvia has an interesting and blooming economy to say the least; it has managed to avoid being hit too hard by the recent Russian economic crisis. The Baltic region has suffered considerately, due to their dependency on the Russian economy, yet Latvia stays resilient. According to the Observatory of Economic Complexity, Latvia currently ranks 35 in a list of 124 countries on the Economic Complexity Index (ECI). Their exports account for about $13.1B for the year of 2013 and it closed with a negative trade balance of $3.76B that same year. Recently Latvia’s government has declared their intention to join the Organisation for Economic Cooperation and Development (OECD), something that will help the country prove itself and show they are not an economically unstable nation and at the same time it will benefit from joining a group that promotes the type of policies that improve the economic and social well-being of the people. Joining the OECD has proven to be a positive challenge for Latvia’s new government and a blessing in disguise, since it has forced the governance of state-owned companies to be improved substantially in order to meet OECD requirements.
Latvia’s main export destinations are Lithuania, Estonia, Germany, Russia and Poland. Here we have some of its main export products.
Machinery and Medical Appliances.
This is a highly diversified industry and it comprises a wide range of products designed to diagnose and treat patients worldwide. The United States is the world leader in the production of medical devices and also its top consumer, yet the constant growth of this industry and the evident trends of trading these products are of significance to Latvia. This can be clearly seen now that it has reached the top spot amongst its exports, sharing the position with wood and articles of wood, a commodity that has been characteristic of this Baltic nation. Medical appliances comprises the largest trade category within the medical device products and the global demand continues to grow driven by increased expending due to the new focus on health care given by upcoming markets in newly developing countries. It is also projected that this demand will only continue to bloom, in response to the aging population in major markets, increasing global income levels and the construction of new medical facilities, hospitals and clinics worldwide.
Wood and articles of wood.
The Investment and Development Agency of Latvia (LIAA) states that Latvia has one of the biggest forested areas in the entire EU, with more than 50% of Latvian territory, a number that reflects about 1.6 more than the world average. The quality of Latvian wood is a byproduct of the good health of their forests and the excellent practices of sustainability certified in FSC and PEFC. Wood has always been the most traded product from this country and it has a huge impact in the local economy, about 73% of output is exported. Latvia possesses one of the highest investment rates in wood and wood products in the European continent and this is not just because of the wood that grows on those forests, but also because of the immense industry in charge of processing and treating the lumber and producing byproducts with 27% of registered manufacturers in Latvia, linked to the forestry sector.
Foodstuff and Hard Liquor
Traditionally, Latvia’s export food products are: alcoholic and non-alcoholic beverages, dairy products, canned fish and grains. Grain purchasing and processing companies mostly belong local private owners. Plants, food and vegetables make up the largest share of the agriculture industry and the total exports of foodstuff out of the country. Food products are becoming more and more important and gaining a bigger share of the total amount of exports coming out of Latvia each year and the industry continues to report growth. Although the largest export usually goes to the EU, the United Arab Emirates is becoming a growing market, showing the largest export increase in the past few years. Alcoholic beverage export, sparkling wine, whiskey, vodka and liquor continue to increase since 2012 as well. These products are of high demand, mostly due to the quality of vodka that is produced in the region and trade transactions with Russia and the United States, some of the biggest importers of hard liquors in the world.
The food industry is the largest processing sector in Latvia and it stands for the fifth part of the total processed goods, so it only makes sense to consider observing the trends of this growing market with constant expansion and a constant source of employment and thriving opportunities to companies in general. With the exception of vodka that is mainly exported to the United States, countries in the European Union continue to be the most important destination for Latvian food exports.