City economy

 What is the city economy in the city like

Since 1991, when Latvia regained its independence, the primary goal for the development of the capital of the Republic of Latvia, has been to see Riga as an economically vibrant, modern and dynamic city, maintaining its natural and cultural heritage. The City of Riga is attempting to create an open Western style economy that complies with EU standards.

Like all economics in transition, Latvia as well as Riga suffered economic recession immediately following separation from the Soviet Union in 1991, but managed stabilize situation by 1995 and had a positive growth rate in 1996 (GDP growth was 2.8%). GDP is expected to continue to grow by approximately 5% in 2002 and the following years. Inflation has been considerably reduced and is expected to be less than 3 per cent a year. Strengthening macroeconomic conditions (see Table 23 )together with the fostering of privatisation and the improvement of the investment climate, contributed to increasing foreign direct investments in 1996 - 2001, most of which was invested in the Riga area. Another factor contributing to increasing capital flow is the positive evaluation of the economic situation by foreign experts. The international rating agency Standard & Poors has granted the city of Riga a positive credit rating and a stable economy forecast.

The quality of life of inhabitants is increasing as well, although very slowly.

At present Riga accounts for 49% of the total industrial output of Latvia.

The following six engines of growth - Riga as the capital of Latvia, transportation centre , financial centre , industry centre , trade and service centre and Riga as tourism centre , drive the Riga's economy. The most important industrial branches now are transit, finances, power industry, food industry, pharmaceutical industry, wood processing, printing and publishing, furniture manufacturing, textile industry, communication equipment manufacturing