LATVIA: Some Growth At A Big Price - Internal Devaluation.

WSJ/ MATTHEW DALTON/
( Readers caution: if this free link suddenly disappears, Thank Rupert Murdoch.)
 
    After stringent measures to push down wages, Latvia has shown some growth.
   But some economists believe its lower trade deficit, stable currency and falling budget deficit are hiding obstacles to  future economic health.
    Those economists question Latvia continuing its peg to the euro. Wages there are down 12% below a few years ago and the country's trade gap has shrunk but exports haven't risen and manufacturers haven't gone on a hiring spree.Unemployment still hovers at 18%.

Editorial Cartoons... In Latvia.

GLOBAL VOICES ONLINE/SPOLITIS BLOGSPOT/14 Cartoons capture the grim economic mood in that small Baltic nation as winter approaches.

Latvia Close To Agreement With IMF, EU And Sweden.

BLOOMBERG/
“Latvia is on the way to coming to an agreement with its international lenders,” said Liga Krapane, Prime Minister Valdis Dombrovskis’s spokeswoman.
The IMF, European Union and Sweden agreed to loan Latvia 7.5 billion-euro ($11 billion) in December and have vigorously urged Dombrovskis to cut budget some 500 million lati ($1 billion) a year until 2012. Swedish Premier Fredrik Reinfeldt said on Oct. 5 Latvia “must correct” its deficit and Riksbank Governor Stefan Ingves has said the country may be left “in the cold” if it doesn’t comply.

Latvia Must Make Severe Cuts In Services To Gain Aid.

GLOBALPOST.COM.
The global recession has hit Latvia hard. Its GDP DROPPED by 19 percent in the second quarter of 2009 and the IMF projected that Latvia will suffer the world's WORST DOWNTURN this year. Because of it, Latvia got an emergency loan package of nearly $10 billion from the IMF and EU. But the aid is contingent on SEVERE cuts in government spending and services.

Latvia's Economy Shrank 22% In Quarter.

Bloomberg.

Latvia's economy shrank 22% last quarter, the steepest decline since the country shed communism almost two decades ago.

"Latvia’s economy, the fastest growing in the European Union in 2006, is now suffering the bloc’s severest recession together with neighboring Lithuania."