Socio-economic Factors Impact Evaluation on Latvia Economy Development

The world financial crisis influenced the national economy of Latvia as well. The gross domestic product decreases approximately by 25% during the crisis, the unemployment level rapidly increased and the investments decreased considerably. Nevertheless, by stabilization of the economical situation, starting with the 4th quarter of 2009, the gross domestic product and investments began to increase, but the external environment risks still remain in connection with the future situation development in the Eurozone and by slowdown of the growth tempo in our main trade partner countries. The growth of Latvia's export is stable, however, goods import is growing slightly more, increasing negative trade balance. Latvia's economy has experienced considerable macroeconomic corrections during the recent years. Together with the change of the total economic paradigm it is required to change the sector policies as well so that they would match the modern, up-to-date and actual scientific methods developed by economy theoreticians and approbated in practice for many times. In Latvia, both the society's ageing and depopulation takes place simultaneously. The society's ageing causes changes in the labor force structure and decreases the labor productivity that is why successful achievement of targets set in Latvia's political documents is connected with definite structural changes in arrangement of national economy's resources for benefit of production of goods and services with higher added value, sectors directed to export, bigger investments into innovative technologies and innovation, improvements in education system and science support. Aim of the study: To evaluate the impact of socio-economic factors on the long-term development of the Latvian economy.