That dollar amount reflects a 58.5% acceleration since 2017 and a 37.5% increase from 2020 to 2021.
Based on the average exchange rate for 2021, Latvia uses the euro which appreciated by 5% against the US dollar since 2017 and increased by 3.9% from 2020 to 2021. The stronger EU currency made Latvia’s exports paid for in weaker US dollars relatively more expensive for international buyers.
Latvia’s most valuable exported products are sawn wood, phone devices including smartphones, fuel wood and sawdust, medication mixes in dosage, wheat, alcoholic beverages, petroleum gases, wine, particle board, and laminated wood including plywood. Collectively, those 10 product groups at the 4-digit Harmonized Tariff System code level represent well over a quarter (29.5%) of the value for all Latvian exports.
Given Latvia’s population of 1.9 million people, its total $20.9 billion in 2021 exports translates to roughly $11,000 for every resident in the north European nation. That per-capita dollar amount exceeds the average $8,400 for one year earlier in 2020.
Latvia’s Top 10 Exports
The following export product groups represent the highest dollar value in Latvian global shipments during 2021 at the 2-digit Harmonized Tariff System (HTS) code level. Also shown is the percentage share each export category represents in terms of overall exports from Latvia.
- Wood: US$3.8 billion (18.4% of total exports)
- Electrical machinery, equipment: $2.1 billion (9.8%)
- Machinery including computers: $1.3 billion (6.4%)
- Mineral fuels including oil: $1.3 billion (6.3%)
- Beverages, spirits, vinegar: $937.6 million (4.5%)
- Iron, steel: $910.5 million (4.4%)
- Vehicles: $840.7 million (4%)
- Cereals: $729.7 million (3.5%)
- Pharmaceuticals: $693.1 million (3.3%)
- Articles of iron or steel: $684.9 million (3.3%)
By value, Latvia’s top 10 exports approach two-thirds (63.9%) of the overall value of its global shipments.
Mineral fuels including oil was the fastest grower among the top 10 export categories, up by 143.9% from 2020 to 2021.
In second place for improving export sales were iron and steel as materials via a 104.4% gain.
Latvia’s shipments of wood posted the third-fastest gain in value up by 53.8%.
The lone decliner among Latvia’s top 10 export categories was cereals, thanks to a -1.7% annual drop. That decline results from lower sales of Latvian wheat and rye on international markets.
Drilling down to the more detailed 4-digit HTS codes, Latvia’s most valuable export products are sawn wood (7% of Latvian global total), mobile phones (4%), fuel wood and sawdust (3.1%), and medication mixes in dosage (2.9%). Trailing those were wheat (2.9%), alcohol including spirits and liqueurs (2.4%), petroleum gases (2.3%), wine (1.6%), particle board (also 1.6%) and laminated wood including plywood (1.5%).
Products Generating Trade Surpluses for Latvia
The following types of Latvian product shipments represent positive net exports or a trade balance surplus. Investopedia defines net exports as the value of a country’s total exports minus the value of its total imports.
In a nutshell, net exports reflect the amount by which foreign spending on a home country’s goods or services exceeds or lags the home country’s spending on foreign goods or services.
- Wood: US$2.7 billion (Up by 45.9% since 2020)
- Cereals: $500 million (Down by -4.1%)
- Furniture, bedding, lighting, signs, prefabricated buildings: $232.9 million (Up by 32.3%)
- Oil seeds: $159.8 million (Up by 6.1%)
- Books, newspapers, pictures: $150.9 million (Up by 19.9%)
- Dairy, eggs, honey: $142.7 million (Up by 17.7%)
- Articles of iron or steel: $83.5 million (Down by -5.4%)
- Meat/seafood preparations: $62 million (Down by -24.4%)
- Stone, plaster, cement, asbestos: $55.8 million (Up by 10.3%)
- Beverages, spirits, vinegar: $48.6 million (Reversing a -$34.8 billion deficit in 2020)
Latvia has highly positive net exports in the international trade of lumber. In turn, these cashflows indicate Latvia’s strong competitive advantages under the wood product category.
Products Causing Trade Deficits for Latvia
Latvia incurred an overall trade deficit of -$3.4 billion during 2021, expanding by 60.1% from the -$2.1 billion in red ink one year earlier.
Below are exports from Latvia that result in negative net exports or product trade balance deficits. These negative net exports reveal product categories where foreign spending on home country Latvia’s goods trail Latvian importer spending on foreign products.
- Mineral fuels including oil: -US$1 billion (Up by 90.8% since 2020)
- Machinery including computers: -$980.1 million (Up by 30.1%)
- Vehicles: -$765.5 million (Up by 42.6%)
- Aircraft, spacecraft: -$746.1 million (Up by 185.7%)
- Plastics, plastic articles: -$464.2 million (Up by 38.8%)
- Electrical machinery, equipment: -$427.3 million (Up by 54%)
- Pharmaceuticals: -$258.4 million (Up by 5.2%)
- Fertilizers: -$212.1 million (Up by 54.6%)
- Paper, paper items: -$208.9 million (Up by 15.4%)
- Iron, steel: -$205.3 million (Up by 54.2%)
Latvia has highly negative net exports and therefore deep international trade deficits under the mineral fuels-related products category–particularly refined petroleum oils, petroleum gases then petroleum coke and other petroleum residues
These cashflow deficiencies clearly indicate Latvia’s competitive disadvantages in the international energy market, but also represent key opportunities for Latvia to improve its position in the global economy through focused innovations.s
Latvian Export Companies
Given that Latvia is a small emerging economy, it should come as no surprise that not one Latvian corporation appears on the Forbes Global 2000 list.
Wikipedia does outline some Latvian export companies. Selected examples are shown below.
- Estonia Piano Factory (pianos)
- Liviko (vodka, other alcoholic beverages)
- Narva Oil Plant (shale oil)
- Rakvere Lihakombinaat (meat products)
- Rexer Ltd (automobiles)
- Saku Brewery (beer, cider, soft drinks, water)
- Tartu Mill AS (grains)
- Tondi Elektroonika (hearing aids)
Where Latvia’s Top Trading Partners Are Located
The latest available country-specific data shows that 74.1% of products exported from Latvia were bought by importers in: Lithuania (15.3% of the global total), Russia (13%), Estonia (11.3%), Germany (6.8%), United Kingdom (5.4%), Sweden (5.3%), Denmark (4.3%), Poland (3.5%), Netherlands (2.9%), Finland (2.5%), Norway (1.9%) and France (1.8%).
From a continental perspective, 86.5% of Latvia’s exports by value were delivered to fellow European countries while 7.2% were sold to importers in Asia. Latvia shipped another 3.6% worth of goods to Africa. Smaller percentages went to North America (1.9%), Latin America excluding Mexico but including the Caribbean (0.5%) then Oceania led by Australia and New Zealand (0.2%).
In macroeconomic terms, Latvia’s total exported goods represent 27.6% of its overall Gross Domestic Product for 2021 ($58.6 billion valued in Purchasing Power Parity US dollars). That 27.6% for exports to overall GDP in PPP for 2021 compares to 25.6% for 2020, These percentages suggest an increasing reliance on products sold on international markets for Latvia’s total economic performance albeit based on a short timeframe. Please note that those metrics include re-exporting activity.
Another key indicator of a country’s economic performance is its unemployment rate. Latvia’s average unemployment rate was 7.9% in January 2021, down from 8.2% one year earlier according to Trading Economics.
Latvia’s capital city is Riga.
See also Latvia’s Top 10 Imports, Russia’s Top 10 Exports, Russia’s Top 10 Imports, Russia Top Trading Partners, Top Russian Trade Balances and Russia’s Top 10 Major Export Companies
Research Sources:
Central Intelligence Agency, The World Factbook Europe: Latvia. Accessed on April 2, 2022
Forbes Global 2000 rankings, The World’s Biggest Public Companies. Accessed on April 2, 2022
International Monetary Fund, Exchange Rates selected indicators (Domestic Currency per U.S. dollar, period average)
International Monetary Fund, World Economic Outlook Database (GDP based on Purchasing Power Parity). Accessed on April 2, 2022
International Trade Centre, Trade Map. Accessed on April 2, 2022
Investopedia, Net Exports Definition. Accessed on April 2, 2022
Wikipedia, Latvia. Accessed on April 2, 2022
Wikipedia, List of Companies of Latvia. Accessed on April 2, 2022
Wikipedia, Purchasing power parity. Accessed on April 2, 2022
