IMF bailout for Latvia is the best of the bad news
Market Commentary: IMF bailout for Latvia is the best of the bad news.
After GDP growth of 10% in 2007 and 12% in 2006, Latvia plunged into recession in 2008 with GDP falling 4%, due to the choking off of foreign credits which led to declining investment, real estate purchases, and private consumption.
Meanwhile inflation began 2009 at 11.5% annually, after reaching a peak of 18% by mid-2008.
The crisis led to the nationalisation of Latvia's largest domestically owned bank, Parex Bank, and to intervention by the International Monetary Fund (IMF) which spearheaded a 7.5 bln euro bailout of Latvia that included funding by the IMF, the European Union and the World Bank.