Latvia's economy shrinks 18.4 pct in third quarter

Latvia's economy contracts by 18.4 percent in third quarter, consumer prices sagging

• On 6:51 am EST, Monday November 9, 2009

RIGA, Latvia (AP) -- Latvia's economic output shrunk by an annual rate of 18.4 percent in the third quarter as one of Europe's most troubled economies struggled to recover from the financial crisis, official data showed Monday.

Retail sales were down 32 percent and industrial production sagged 17 percent from the same period last year, the national statistics agency said.

Meanwhile consumer prices fell by 0.2 percent from September to October, the agency said.

Like neighboring Estonia and Lithuania, Latvia has seen its economy nosedive after years of strong growth following European Union membership in 2004.

The three Baltic countries had the worst-performing economies of the 27-nation EU in the second quarter, according to the bloc's statistics agency, Eurostat.

Last year Latvia, faced with imminent bankruptcy, turned to the EU and the International Monetary Fund for a euro7.5 billion ($11 billion) bailout package.