Latvia: An Ailing Economy on the Road to Recovery

May 13, 2010 — Two years ago, Latvia was on the brink of bankruptcy. The government obtained loans from the International Monetary Fund and the European Union, and in return had to undertake drastic financial cuts. Now the Latvian economy is on the upswing again.Times have been tough in Latvia. Wages and pensions were slashed, and schools let go half of their teaching staff. Now the painful measures are starting to pay off. Unemployment is still at 20 percent and investment remains low, but Riga is optimistic that the Latvian economy will return to growth in the second half of 2010. Some Latvians cite the years under Soviet rule, when the nation was forced to learn great patience and fortitude, as one of the reasons they were able to stay the course.