Medicines production and sales account for 55% of the industry (249 companies with aggregate turnover of EUR 1.202 billion), healthcare – 34% (388 companies, EUR 750.780 million), trade in medical equipment and supplies – 12% (142 companies, EUR 243.559 million);
Latvian pharmaceutical companies export 90% of their output;
Latvian pharmaceutical companies export 90% of their output;
Latvian healthcare system is slowly recovering from the crisis, and 2011 and 2012 were the years when health-care funding system changed profoundly as new ways were being sought to transform the budget-funded medicine system into a system that would be fully or partly insurance-based.
The health care system in Latvia is currently experiencing significant difficulties. However, private business in this industry, as well as in pharmaceuticals, is profitable and gainful.
Even though the transport and logistics industry is one of the most important sectors of the national economy of Latvia, downturn is continuing in the sector because of the uncertain situation in Europe and tensions with Russia. Year on year, the proportion of transport and warehousing in the total gross domestic product decreased 0.5 percentage points.
Companies selling food and beverages make up 50% of the trade industry (1,382 companies with total turnover of EUR 5.21 billion), followed by companies selling household goods, DIY and home improvement companies – 22% (725 companies, turnover of EUR 2.27 billion), companies selling office supplies – 10% (413 companies, turnover of EUR 1.06 billion), clothing and footwear retailers – 5% (394 companies, turnover of EUR 523 million), online stores – 4.8% (267 companies, turnover of EUR 364 million).
The economic situation has improved and retail trade has returned to growth over the past two years.
The last five years were a period of extensive changes in the trade sector – turnover in the sector experienced rapid rises and falls, and was affected by the global crisis.
There are 448 information technology (IT) and computer technology companies with annual turnover of over EUR 145,000, their total turnover exceeds EUR 1.389 billion, profit – EUR 119 million, and they employ a total of 10,000 people. IT and software development companies make up 54% of this sector (357 companies with a total turnover of EUR 755 million), computer hardware dealers - 46% (91 companies, EUR 633 million).
Latvia has the fourth fastest Internet in the world, only a step behind the technology superpowers. Export from ICT companies continues to grow every year, which points to the fact that those enterprises whose chief market currently is local also have the potential of evolving into successful players on foreign markets, as several start-ups have shown.
Latvian information and communications technology (ICT) companies have world-class abilities. ICT exports are strong, and have proven themselves. Companies presently mainly selling mainly to the domestic market have the opportunity to grow and develop exports by transferring experience gained on the domestic market to neighboring countries and the wider European market.
The main branches of Latvia’s industrial production are mechanical engineering and metalworking (45%), chemical industry (17%), light industry (19%), electrical engineering (9.9%), printing and publishing (8%), scientific research and production (1.8%).There are 1,261 companies with annual turnover of more than EUR 145,000, their aggregate turnover is EUR 2.81 billion, aggregate profit – EUR 99 million, and the total number of employees – 34,000.
Forests cover 3.383 million hectares in Latvia, or 52% of the country’s territory, which ranks Latvia fourth in Europe after Finland, Sweden and Slovenia;The growing stock of Latvian woods is 670 million cubic meters. Each year, 12 million cubic meters of wood is logged from Latvia’s forests, however, the annual increase in growing stock is two-times more- at least 25 million cubic meters;
During the first half of 2016, the value of Latvian food and agricultural exports grew 26% against the same period in 2015, making up 18.4% of the country’s total exports. With 12% export growth, Latvia ranks third among European Union (EU) members by export growth after Cyprus and Croatia which showed 20.3% and 14.6% export growth respectively.
In 2016, Latvia exported its fish products to 33 countries. The foreign trade balance of Latvian fish products and canned fish remained positive in 2015 - +3.4 million euros. In the first six months of 2016, compared to the same period of the previous year, export volumes increased more than two-fold and reached 57,400 tons.
According to data from the Union of Latvian Fish Processing Industry, the fishing industry has been the largest exporting industry over the past few years. 95% of its production has been exported to more than 40 countries.
Over the past two years, agricultural and food products have been among the most important Latvian export goods. In 2011, agricultural and food product export amounted to 16,2% of the country’s total export value. In the first half of 2012, the figure increased to 16,7%.
Forest industry export exceeded LVL 1 billion; next challenge – raising productivity
The agriculture branch in Latvia develops in a rapid manner – the amount of export is growing, and the amounts of manufactured products have not decreased, even despite the global crisis.
The products of forest industry have always been the leaders of the products for export. In 2010, this branch has had the quickest recovery from the impacts caused by economic crisis.
The sector has 1,027 companies whose annual turnover exceeds EUR 145,00, and their aggregate turnover is EUR 1.235 billion, profit – EUR 61 million, while the number of persons they employ exceeds 30,000.35% of the industry’s turnover was in the catering sector (526 companies with an aggregate turnover of EUR 436.759 million), followed by accommodation/lodging and tourism services sector – 34% (275 companies with an aggregate turnover of EUR 422.756 million), and entertainment and sports – 30% (226 companies with an aggregate turnover of EUR 375.786 million).
In 2011, the number of foreign tourists visiting Latvia increased by 21% when compared to 2010. Furthermore, there was also a 14% increase in the amount of money tourists spent in Latvia. In 2014, Riga will also become Europe’s Capital of Culture.
Accession to the European Union, several important events of global importance – Eurovision, the world hockey championship, and the NATO summit – have helped the rapid growth of the Latvian hospitality industry. Presently, the Latvian tourism industry is recovering from the effects of the global economic crisis and is striving to serve individual foreign tourists seeking recreation at a leisurely pace.
In 2015 the power market was liberalized for households in Latvia, allowing new players to show up and present competitive offers to customers. In April 2017 liberalization of the natural gas market will take place, providing for the end of JSC Latvijas Gāze natural gas utility’s monopoly rights and opening of the market.
The gradual opening of the electric energy market in Latvia has finally led to a sense of competition and future potential.
After three years of decline, stable growth was observed in the industry at the end of 2011 and at the beginning of 2012.
Competition on the electricity market is developing very slowly legislative and political battles delay the implementation of green energy.
The number of students in higher education in Latvia continues to decrease, therefore the state is planning different scenarios to stimulate the education sector, for example, to more actively attract a number of foreign students and reduce the number of higher educational establishments.
Despite the much criticized education reforms and ambitious future goals to develop the education sector, results from reforms have started to gradually bear fruit
During the last 20 years, in addition to the state-founded educational institutions, private education enterprises have also developed rapidly - mainly in the areas of pre-school and higher education.
Although the Latvian economy was growing a little slower than anticipated in 2016, the financial market resisted the overall trend and proved its continuing stability. Last year, Latvian commercial banks continued to pursue their development strategies, and main banking indices improved.
As the economic situation stabilised and growth resumed after the crisis, the banking sector returned to profitability in 2011/12.
The financial services sector in Latvia suffered most gravely from the crisis: losses of the banking sector for two years have "eaten away" profits for the previous five years. The number of bad loans has increased, including outstanding loan liabilities.
- In regards to the proportion of the sector’s overall turnover, 46% of overall turnover is made up of construction and finishing work, 24% is made up of the sale of construction materials, 17% construction of roads and bridges, 8.6% manufacturing of construction materials, and 5.5% architectural and design services.
The construction industry in Latvia has experienced a very rapid decline over the past two years. Although it has been said that there are signs of stabilization in the construction market, statistical data speaks against this.