Latvia: Growth is weakening but economy remains resilient

Having largely recovered from the global crisis, the economy is now suffering from low prospects in the EU and Russia.

Insolvencies are slightly going up but still below pre-crisis levels. The banking sector is gradually improving but remains reluctant to lend.

The successful internal devaluation allowed the country to regain competitiveness. Inflation is low and public finances are sound. Current account close to balance, but external debt remains high.