The four coalition parties-Ms Straujuma's Unity, the Reform Party (RP), National Alliance and the Union of Greens and Farmers (ZZS)-have agreed to continue to co-operate after the October election. However, the RP may lose its
parliamentary representation, and at least one new party is likely to gain seats.
Latvia posted a small budget surplus of 0.2% of GDP (excluding net acquisition of non-financial assets) in 2013, and we forecast a balanced budget in 2014. Any deficits over the forecast period will remain well within the EU's 3% of GDP limit on the accruals-based (ESA 95) measure.
The current-account deficit narrowed to 0.8% of GDP in 2013 as a result of
strong export growth in the first half of the year. We expect the deficit to remain
a similar size in 2014 as both exports and imports fell owing to external
uncertainties. The shortfall is likely to widen gradually thereafter as domestic
Vlemand rebounds, but to remain well within pre-crisis levels.

Country forecast overview 6

Highlights 6

Business environment rankings 7

Fact sheet 8

Outlook for 2014-18 9

Political outlook 9

Economic policy outlook 10

Economic forecast 12

Data summary 14

Data sources and definitions 20

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