Based on the average exchange rate for 2020, Latvia uses the euro which appreciated by 3.1% against the US dollar since 2016 and increased by 2% from 2019 to 2020. The stronger EU currency in 2020 made Latvia’s exports paid for in weaker US dollars relatively more expensive for international buyers.
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%).
Given Latvia’s population of 1.9 million people, its total $16.2 billion in 2020 exports translates to roughly $8,400 for every resident in the north European nation.
Latvia’s Top 10 Exports
The following export product groups represent the highest dollar value in Latvian global shipments during 2020 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$2.5 billion (15.5% of total exports)
- Electrical machinery, equipment: $1.9 billion (11.9%)
- Machinery including computers: $1.1 billion (6.9%)
- Beverages, spirits, vinegar: $982.8 million (6.1%)
- Cereals: $744.9 million (4.6%)
- Vehicles: $669.2 million (4.1%)
- Mineral fuels including oil: $576.3 million (3.6%)
- Articles of iron or steel: $522.8 million (3.2%)
- Pharmaceuticals: $522.7 million (3.2%)
- Furniture, bedding, lighting, signs, prefabricated buildings: $504.9 million (3.1%)
Latvia’s top 10 exports accounted for approaching two-thirds (62.2%) of the overall value of its global shipments.
Beverages, spirits and vinegar was the fastest grower among the top 10 export categories, up by 32.2% from 2019 to 2020. In second place for improving export sales was machinery including computers via a 30.8% gain. Latvia’s shipments of cereals posted the third-fastest gain in value up by 28.2% led by higher global sales of wheat.
The leading decliner among Latvia’s top 10 export categories was vehicles thanks to a -14.6% drop year over year.
Drilling down to the more detailed 4-digit HTS codes, Latvia’s most valuable export products are mobile phones (5.7% of total) and sawn or chipped lumber pieces (4.6%). Trailing that were wheat (4%), alcohol including spirits and liqueurs (3.7%), fuel wood including wood chips and sawdust (3.2%), medication mixes in dosage (2.9%), wine (1.8%), laminated wood (1.7%), cars (1.5%) and television receivers, monitors or projectors (also 1.5%).
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$1.8 billion (Down by -2.7% since 2019)
- Cereals: $525.7 million (Up by 25.8%)
- Furniture, bedding, lighting, signs, prefabricated buildings: $178.9 million (Up by 18.6%)
- Oil seeds: $149.3 million (Up by 118.2%)
- Books, newspapers, pictures: $125.9 million (Up by 4.8%)
- Dairy, eggs, honey: $121.3 million (Down by -3.8%)
- Meat/seafood preparations: $83.4 million (Up by 39.6%)
- Articles of iron or steel: $73.8 million (Up by 25.1%)
- Stone, plaster, cement, asbestos: $50.8 million (Up by 69.1%)
- Milling products, malt, starches: $40.4 million (Up by 3.9%)
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.
Latvia incurred an overall trade deficit of -$2.1 billion during 2020, contracting by -35.8% from the -$3.3 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.
- Machinery including computers: -US$731.4 million (Down by -12.5% since 2019)
- Mineral fuels including oil: -$541.4 million (Down by -39.7%)
- Vehicles : -$532.7 million (Down by -24.3%)
- Plastics, plastic articles: -$327.6 million (Down by -0.5%)
- Electrical machinery, equipment: -$299.4 million (Down by -14.8%)
- Aircraft, spacecraft: -$275.8 million (Down by -61.3%)
- Pharmaceuticals: -$259.1 million (Up by 55.3%)
- Paper, paper items: -$181.4 million (Up by 1.0%)
- Fertilizers: -$138.2 million (Down by -0.8%)
- Iron, steel: -$132.7 million (Down by -4.3%)
Latvia has highly negative net exports and therefore deep international trade deficits under the machinery including computers cateogory and for mineral fuels-related products–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.
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)
In macroeconomic terms, Latvia’s total exported goods represent 27.6% of its overall Gross Domestic Product for 2020 ($58.6 billion valued in Purchasing Power Parity US dollars). That 27.6% for exports to overall GDP in PPP for 2020 compares to 25.6% for 2019, 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.
Central Intelligence Agency, The World Factbook Europe: Latvia. Accessed on April 3, 2021
Forbes Global 2000 rankings, The World’s Biggest Public Companies. Accessed on April 3, 2021
International Monetary Fund, Exchange Rates selected indicators (National Currency per U.S. dollar, period average). Accessed on April 3, 2021
International Monetary Fund, World Economic Outlook Database (GDP based on Purchasing Power Parity). Accessed on April 3, 2021
International Trade Centre, Trade Map. Accessed on April 3, 2021
Investopedia, Net Exports Definition. Accessed on April 3, 2021
Wikipedia, Gross domestic product. Accessed on April 3, 2021
Wikipedia, Latvia. Accessed on April 3, 2021
Wikipedia, List of Companies of Latvia. Accessed on April 3, 2021
Wikipedia, Purchasing power parity. Accessed on April 3, 2021