Geography
Located on eastern shore of the
Baltic Sea Latvia lies in
East European Plain. It consists of fertile, low-lying plains, largely covered by
forest, mostly
pines, the highest point being the
Gaiziņkalns at 311.6 m (1,020
ft).
Common species of wildlife in Latvia include
deer,
wild boar,
fox,
beaver and
wolves The Latvian
climate is
humid, continental and
temperate in nature, with temperatures varying on average from -5 to +15
°C,
providing warm-water ports and water to more than 3,000
lakes and over 12,000
rivers, only seventeen of which are longer than 100
kilometers (sixty
miles).
The major rivers include the
Daugava, the
Lielupe, the
Gauja, and the
Salaca. An inlet of the
Baltic Sea, the shallow
Gulf of Riga is situated in the northwest of the country. Latvia's coastline extends for 531 kilometers.
Its neighbors include
Estonia on the north (267 kilometers of common border),
Lithuania on the south (453 kilometers),
Belarus on the southeast (141 kilometers), and
Russia on the east (217 kilometers).
Prior to World War II, Latvia bordered eastern Poland, but as a result of boundary changes by the Soviet Union, this territory was attached to Belorussia, Latvia also lost part of the former
Abrene District i.e. 6% of its territory to Russia for the same reason.
Economy
ince the year
2000 Latvia has had one of the highest (
GDP) growth rates in
Europe [3]. In
2006, annual GDP growth was 11.9% and
inflation was 6.2%.
Unemployment was 8.5% - almost unchanged compared to the previous two years. However, it has recently dropped to 7%, partly due to active economic
migration, mostly to the
Republic of Ireland and
United Kingdom.
Privatization has been mostly completed, except for some of the large
state-owned utilities. Latvia is a member of the
World Trade Organization (1999) and the
European Union (2004).
The fast growing economy is regarded as a possible
economic bubble, because it is driven mostly by growth of domestic
consumption, financed by a serious increase of private
debt, as well as negative foreign
trade balance. The prices of
real estate, which increases at amount approx. 5% a month (due to lack of tax legislation that could prevent speculations in real estate market), are perceived to be too high for the economy, which mainly produces low valued goods and
raw materials. As stated by Ober-Haus, a real estate company operating in Poland and the Baltics, the prices of some segments of real estate market have been stabilized as of summer
2006 and some experts expect serious reduction of real estate prices in the near future. The government introduced special program to reduce inflation and remain high growth rates recently
[4]. The main points of the plan are:
- to create a non-deficit country budget for the current 2007 year and a budget with a surplus for 2008 and beyond
- to tax any transaction concerning real estate that has been in a person's possession less than three years
- to increase control of credit
- to increase energy effectiveness in homes and business to guard against possible rises in energy costs
- to increase work productivity and stimulate competition in business
Latvia plans to introduce the Euro as the country's currency but, due to the inflation being above EMU's guidelines, this is unlikely to happen before 2010.
