Coordinates: 57°N 25°E / 57°N 25°E
Republic of Latvia
|Government||Unitary parliamentary republic|
from Germany and the Soviet Union
|18 November 1918|
|26 January 1921|
|7 November 1922|
|21 August 1991|
|1 May 2004|
|64,589 km2 (24,938 sq mi) (122nd)|
• Water (%)
• 2022 estimate
|29.6/km2 (76.7/sq mi) (147th)|
|GDP (PPP)||2022 estimate|
• Per capita
|GDP (nominal)||2022 estimate|
|$40.588 billion (100th)|
• Per capita
|Gini (2021)|| 35.7|
|HDI (2021)|| 0.863|
very high · 39th
|Currency||Euro (€) (EUR)|
|Time zone||UTC+2 (EET)|
• Summer (DST)
|ISO 3166 code||LV|
Latvia (/ˈlɑːtviə/ or /ˈlætviə/ (listen); Latvian: Latvija [ˈlatvija]; Latgalian: Latveja; Livonian: Lețmō), officially the Republic of Latvia (Latvian: Latvijas Republika, Latgalian: Latvejas Republika, Livonian: Lețmō Vabāmō), is a country in the Baltic region of Northern Europe. It is one of the Baltic states; and is bordered by Estonia to the north, Lithuania to the south, Russia to the east, Belarus to the southeast, and shares a maritime border with Sweden to the west. Latvia covers an area of 64,589 km2 (24,938 sq mi), with a population of 1.9 million. The country has a temperate seasonal climate. Its capital and largest city is Riga. Latvians belong to the ethno-linguistic group of the Balts and speak Latvian, one of the only two[a] surviving Baltic languages. Russians are the most prominent minority in the country, at almost a quarter of the population.
After centuries of
Latvia is a
The name Latvija is derived from the name of the ancient
Around 3000 BC, the proto-Baltic ancestors of the Latvian people settled on the eastern coast of the
In the 12th century in the territory of Latvia, there were lands with their rulers:
Although the local people had contact with the outside world for centuries, they became more fully integrated into the European socio-political system in the 12th century.
At the beginning of the 13th century, Germans ruled large parts of what is currently Latvia.
Reformation period and Polish and Swedish rule
In the 17th and early 18th centuries, the Polish–Lithuanian Commonwealth, Sweden, and Russia struggled for supremacy in the eastern Baltic. After the Polish–Swedish War, northern Livonia (including Vidzeme) came under Swedish rule. Riga became the capital of Swedish Livonia and the largest city in the entire Swedish Empire. Fighting continued sporadically between Sweden and Poland until the Truce of Altmark in 1629. In Latvia, the Swedish period is generally remembered as positive; serfdom was eased, a network of schools was established for the peasantry, and the power of the regional barons was diminished.
Several important cultural changes occurred during this time. Under Swedish and largely German rule, western Latvia adopted
Livonia & Courland in the Russian Empire (1795–1917)
This section needs additional citations for verification. (March 2015))
The emancipation of the serfs took place in Courland in 1817 and in Vidzeme in 1819. In practice, however, the emancipation was actually advantageous to the landowners and nobility, as it dispossessed peasants of their land without compensation, forcing them to return to work at the estates "of their own free will".
During these two centuries Latvia experienced economic and construction boom – ports were expanded (Riga became the largest port in the Russian Empire), railways built; new factories, banks, and a university were established; many residential, public (theatres and museums), and school buildings were erected; new parks formed; and so on. Riga's boulevards and some streets outside the Old Town date from this period.
Numeracy was also higher in the Livonian and Courlandian parts of the Russian Empire, which may have been influenced by the Protestant religion of the inhabitants.
During the 19th century, the social structure changed dramatically.
Declaration of independence and interwar period
The General representative of Germany August Winnig formally handed over political power to the Latvian Provisional Government on 26 November. On 18 November, the Latvian People's Council entrusted him to set up the government. He took the office of Minister of Agriculture from 18 November to 19 December. He took a position of Prime Minister from 19 November 1918 to 13 July 1919.
Estonian and Latvian forces defeated the Germans at the Battle of Wenden in June 1919, and a massive attack by a predominantly German force—the West Russian Volunteer Army—under Pavel Bermondt-Avalov was repelled in November. Eastern Latvia was cleared of Red Army forces by Latvian and Polish troops in early 1920 (from the Polish perspective the Battle of Daugavpils was a part of the Polish–Soviet War).
A freely elected Constituent assembly convened on 1 May 1920, and adopted a liberal constitution, the Satversme, in February 1922. The constitution was partly suspended by Kārlis Ulmanis after his coup in 1934 but reaffirmed in 1990. Since then, it has been amended and is still in effect in Latvia today. With most of Latvia's industrial base evacuated to the interior of Russia in 1915, radical land reform was the central political question for the young state. In 1897, 61.2% of the rural population had been landless; by 1936, that percentage had been reduced to 18%.
By 1923, the extent of cultivated land surpassed the pre-war level. Innovation and rising productivity led to rapid growth of the economy, but it soon suffered from the effects of the
Latvia in World War II
Early in the morning of 24 August 1939, the Soviet Union and Nazi Germany signed a 10-year non-aggression pact, called the Molotov–Ribbentrop Pact. The pact contained a secret protocol, revealed only after Germany's defeat in 1945, according to which the states of Northern and Eastern Europe were divided into German and Soviet "spheres of influence". In the north, Latvia, Finland and Estonia were assigned to the Soviet sphere. A week later, on 1 September 1939, Germany invaded Poland; on 17 September, the Soviet Union invaded Poland as well.: 32
After the conclusion of the Molotov-Ribbentrop Pact, most of the Baltic Germans left Latvia by agreement between Ulmanis's government and Nazi Germany under the Heim ins Reich programme. In total 50,000 Baltic Germans left by the deadline of December 1939, with 1,600 remaining to conclude business and 13,000 choosing to remain in Latvia. Most of those who remained left for Germany in summer 1940, when a second resettlement scheme was agreed. The racially approved being resettled mainly in Poland, being given land and businesses in exchange for the money they had received from the sale of their previous assets.: 46
On 5 October 1939, Latvia was forced to accept a "mutual assistance" pact with the Soviet Union, granting the Soviets the right to station between 25,000 and 30,000 troops on Latvian territory. State administrators were murdered and replaced by Soviet cadres. Elections were held with single pro-Soviet candidates listed for many positions. The resulting people's assembly immediately requested admission into the USSR, which the Soviet Union granted. Latvia, then a puppet government, was headed by Augusts Kirhenšteins. The Soviet Union incorporated Latvia on 5 August 1940, as the Latvian Soviet Socialist Republic.
The Soviets dealt harshly with their opponents – prior to Operation Barbarossa, in less than a year, at least 34,250 Latvians were deported or killed. Most were deported to Siberia where deaths were estimated at 40 percent.: 48
On 22 June 1941, German troops attacked Soviet forces in Operation Barbarossa. There were some spontaneous uprisings by Latvians against the Red Army which helped the Germans. By 29 June Riga was reached and with Soviet troops killed, captured or retreating, Latvia was left under the control of German forces by early July.: 78–96 The occupation was followed immediately by SS Einsatzgruppen troops, who were to act in accordance with the Nazi Generalplan Ost that required the population of Latvia to be cut by 50 percent.: 64 : 56
Under German occupation, Latvia was administered as part of
More than 200,000 Latvian citizens died during World War II, including approximately 75,000 Latvian
In the 23rd block of the Vorverker cemetery, a monument was erected after the Second World War for the people of Latvia who had died in Lübeck from 1945 to 1950.
Soviet era (1940–1941, 1944–1991)
In 1944, when Soviet military advances reached Latvia, heavy fighting took place in Latvia between German and Soviet troops, which ended in another German defeat. In the course of the war, both occupying forces conscripted Latvians into their armies, in this way increasing the loss of the nation's "live resources". In 1944, part of the Latvian territory once more came under Soviet control. The Soviets immediately began to reinstate the Soviet system. After the German surrender, it became clear that Soviet forces were there to stay, and
Anywhere from 120,000 to as many as 300,000 Latvians took refuge from the Soviet army by fleeing to Germany and Sweden. Most sources count 200,000 to 250,000 refugees leaving Latvia, with perhaps as many as 80,000 to 100,000 of them recaptured by the Soviets or, during few months immediately after the end of war, returned by the West. The Soviets reoccupied the country in 1944–1945, and further deportations followed as the country was collectivised and
On 25 March 1949, 43,000 rural residents ("kulaks") and Latvian nationalists were deported to Siberia in a sweeping Operation Priboi in all three Baltic states, which was carefully planned and approved in Moscow already on 29 January 1949. This operation had the desired effect of reducing the anti-Soviet partisan activity.: 326 Between 136,000 and 190,000 Latvians, depending on the sources, were imprisoned or deported to Soviet concentration camps (the Gulag) in the post-war years from 1945 to 1952.
In the post-war period, Latvia was made to adopt Soviet farming methods. Rural areas were forced into
Since Latvia had maintained a well-developed infrastructure and educated specialists, Moscow decided to base some of the Soviet Union's most advanced manufacturing in Latvia. New industry was created in Latvia, including a major machinery factory RAF in Jelgava, electrotechnical factories in Riga, chemical factories in Daugavpils, Valmiera and Olaine—and some food and oil processing plants. Latvia manufactured trains, ships, minibuses, mopeds, telephones, radios and hi-fi systems, electrical and diesel engines, textiles, furniture, clothing, bags and luggage, shoes, musical instruments, home appliances, watches, tools and equipment, aviation and agricultural equipment and long list of other goods. Latvia had its own film industry and musical records factory (LPs). However, there were not enough people to operate the newly built factories. To maintain and expand industrial production, skilled workers were migrating from all over the Soviet Union, decreasing the proportion of ethnic Latvians in the republic. The population of Latvia reached its peak in 1990 at just under 2.7 million people.
In late 2018 the National Archives of Latvia released a full alphabetical index of some 10,000 people recruited as agents or informants by the Soviet KGB. 'The publication, which followed two decades of public debate and the passage of a special law, revealed the names, code names, birthplaces and other data on active and former KGB agents as of 1991, the year Latvia regained its independence from the Soviet Union.'
Restoration of independence in 1991
In the second half of the 1980s, Soviet leader Mikhail Gorbachev started to introduce political and economic reforms in the Soviet Union that were called glasnost and perestroika. In the summer of 1987, the first large demonstrations were held in Riga at the Freedom Monument—a symbol of independence. In the summer of 1988, a national movement, coalescing in the Popular Front of Latvia, was opposed by the Interfront. The Latvian SSR, along with the other Baltic Republics was allowed greater autonomy, and in 1988, the old pre-war Flag of Latvia flew again, replacing the Soviet Latvian flag as the official flag in 1990.
In 1989, the
However, the central power in Moscow continued to regard Latvia as a Soviet republic in 1990 and 1991. In January 1991, Soviet political and military forces unsuccessfully tried to overthrow the Republic of Latvia authorities by occupying the central publishing house in Riga and establishing a Committee of National Salvation to usurp governmental functions. During the transitional period, Moscow maintained many central Soviet state authorities in Latvia.
The Popular Front of Latvia advocated that all permanent residents be eligible for Latvian citizenship, however, universal citizenship for all permanent residents was not adopted. Instead, citizenship was granted to persons who had been citizens of Latvia on the day of loss of independence in 1940 as well as their descendants. As a consequence, the majority of ethnic non-Latvians did not receive Latvian citizenship since neither they nor their parents had ever been citizens of Latvia, becoming non-citizens or citizens of other former Soviet republics. By 2011, more than half of non-citizens had taken naturalization exams and received Latvian citizenship, but in 2015 there were still 290,660 non-citizens in Latvia, which represented 14.1% of the population. They have no citizenship of any country, and cannot participate in the parliamentary elections. Children born to non-nationals after the re-establishment of independence are automatically entitled to citizenship.
The Republic of Latvia declared the end of the transitional period and restored full independence on 21 August 1991, in the aftermath of the failed
Approximately 72% of Latvian citizens are Latvian, while 20% are Russian; less than 1% of non-citizens are Latvian, while 71% are Russian. The government denationalized private property confiscated by the Soviets, returning it or compensating the owners for it, and privatized most state-owned industries, reintroducing the prewar currency. Albeit having experienced a difficult transition to a liberal economy and its re-orientation toward Western Europe, Latvia is one of the fastest growing economies in the European Union. In 2014, Riga was the European Capital of Culture, Latvia joined the eurozone and adopted the EU single currency euro as the currency of the country and Latvian Valdis Dombrovskis was named vice-president of the European Commission. In 2015 Latvia held the presidency of Council of the European Union. Big European events have been celebrated in Riga such as the Eurovision Song Contest 2003 and the European Film Awards 2014. On 1 July 2016, Latvia became a member of the OECD.
Latvia lies in Northern Europe, on the eastern shores of the
The total length of Latvia's boundary is 1,866 km (1,159 mi). The total length of its land boundary is 1,368 km (850 mi), of which 343 km (213 mi) is shared with
Most of Latvia's territory is less than 100 m (330 ft)
Latvia has a
Coastal regions, especially the western coast of the Courland Peninsula, possess a more maritime climate with cooler summers and milder winters, while eastern parts exhibit a more continental climate with warmer summers and harsher winters. Nevertheless, the temperature variations are little as the territory of Latvia is relatively small. Moreover, Latvia's terrain is particularly flat (no more than 350 meters high), thus the Latvian climate is not differentiated by altitude.
Latvia has four pronounced seasons of near-equal length. Winter starts in mid-December and lasts until mid-March. Winters have average temperatures of −6 °C (21 °F) and are characterized by stable snow cover, bright sunshine, and short days. Severe spells of winter weather with cold winds, extreme temperatures of around −30 °C (−22 °F) and heavy snowfalls are common. Summer starts in June and lasts until August. Summers are usually warm and sunny, with cool evenings and nights. Summers have average temperatures of around 19 °C (66 °F), with extremes of 35 °C (95 °F). Spring and autumn bring fairly mild weather.
|Highest temperature||37.8 °C (100 °F)||Ventspils||4 August 2014|
|Lowest temperature||−43.2 °C (−46 °F)||Daugavpils||8 February 1956|
|Last spring frost||–||Large parts of territory||24 June 1982|
|First autumn frost||–||
|15 August 1975|
|1,007 mm (39.6 in)||
|Lowest yearly precipitation||384 mm (15.1 in)||Ainaži||1939|
|Highest daily precipitation||160 mm (6.3 in)||Ventspils||9 July 1973|
|Highest monthly precipitation||330 mm (13.0 in)||
|Lowest monthly precipitation||0 mm (0 in)||Large parts of territory||May 1938 and May 1941|
|126 cm (49.6 in)||Gaiziņkalns||March 1931|
|Month with the most days with blizzards||19 days||Liepāja||February 1956|
|The most days with fog in a year||143 days||Gaiziņkalns area||1946|
|Longest-lasting fog||93 hours||Alūksne||1958|
|Highest atmospheric pressure||31.5 inHg (1,066.7 mb)||Liepāja||January 1907|
|Lowest atmospheric pressure||27.5 inHg (931.3 mb)||Vidzeme Upland||13 February 1962|
|The most days with thunderstorms in a year||52 days||Vidzeme Upland||1954|
|Strongest wind||34 m/s, up to 48 m/s||Not specified||2 November 1969|
2019 was the warmest year in the history of weather observation in Latvia with an average temperature +8.1 °C higher.
Most of the country is composed of fertile lowland plains and moderate hills. In a typical Latvian landscape, a mosaic of vast forests alternates with fields, farmsteads, and pastures. Arable land is spotted with birch groves and wooded clusters, which afford a habitat for numerous plants and animals. Latvia has hundreds of kilometres of undeveloped seashore—lined by pine forests, dunes, and continuous white sand beaches.
Latvia has the fifth highest proportion of land covered by forests in the European Union, after Sweden, Finland, Estonia and Slovenia. Forests account for 3,497,000 ha (8,640,000 acres) or 56% of the total land area.
Latvia has over 12,500 rivers, which stretch for 38,000 km (24,000 mi). Major rivers include the
Agricultural areas account for 1,815,900 ha (4,487,000 acres) or 29% of the total land area. With the dismantling of collective farms, the area devoted to farming decreased dramatically – now farms are predominantly small. Approximately 200 farms, occupying 2,750 ha (6,800 acres), are engaged in ecologically pure farming (using no artificial fertilizers or pesticides).
Latvia has a long tradition of conservation. The first laws and regulations were promulgated in the 16th and 17th centuries. There are 706 specially state-level protected natural areas in Latvia: four national parks, one biosphere reserve, 42 nature parks, nine areas of protected landscapes, 260 nature reserves, four strict nature reserves, 355 nature monuments, seven protected marine areas and 24 microreserves. Nationally protected areas account for 12,790 km2 (4,940 sq mi) or around 20% of Latvia's total land area. Latvia's Red Book (Endangered Species List of Latvia), which was established in 1977, contains 112 plant species and 119 animal species. Latvia has ratified the international Washington, Bern, and Ramsare conventions.
The 2012 Environmental Performance Index ranks Latvia second, after Switzerland, based on the environmental performance of the country's policies.
Access to biocapacity in Latvia is much higher than world average. In 2016, Latvia had 8.5 global hectares of biocapacity per person within its territory, much more than the world average of 1.6 global hectares per person. In 2016 Latvia used 6.4 global hectares of biocapacity per person - their ecological footprint of consumption. This means they use less biocapacity than Latvia contains. As a result, Latvia is running a biocapacity reserve.
Approximately 30,000 species of flora and fauna have been registered in Latvia.
Species that are endangered in other European countries but common in Latvia include: black stork (
Several species of flora and fauna are considered national symbols. Oak (Quercus robur, Latvian: ozols), and linden (Tilia cordata, Latvian: liepa) are Latvia's national trees and the daisy (Leucanthemum vulgare, Latvian: pīpene) its national flower. The white wagtail (Motacilla alba, Latvian: baltā cielava) is Latvia's national bird. Its national insect is the two-spot ladybird (Adalia bipunctata, Latvian: divpunktu mārīte). Amber, fossilized tree resin, is one of Latvia's most important cultural symbols. In ancient times, amber found along the Baltic Sea coast was sought by Vikings as well as traders from Egypt, Greece and the Roman Empire. This led to the development of the Amber Road.
Several nature reserves protect unspoiled landscapes with a variety of large animals. At Pape Nature Reserve, where European bison, wild horses, and recreated aurochs have been reintroduced, there is now an almost complete Holocene megafauna also including moose, deer, and wolf.
Latvia is a
In 2010 parliamentary election ruling centre-right coalition won 63 out of 100 parliamentary seats. Left-wing opposition Harmony Centre supported by Latvia's Russian-speaking minority got 29 seats. In November 2013, Latvian Prime Minister Valdis Dombrovskis, in office since 2009, resigned after at least 54 people were killed and dozens injured in the collapse at a supermarket in Riga.
In 2014 parliamentary
In 2018 parliamentary
Latvia is a member of the United Nations,
Latvia has established diplomatic relations with 158 countries. It has 44 diplomatic and consular missions and maintains 34 embassies and 9 permanent representations abroad. There are 37 foreign embassies and 11 international organisations in Latvia's capital
Latvia's foreign policy priorities include co-operation in the Baltic Sea region, European integration, active involvement in international organisations, contribution to European and transatlantic security and defence structures, participation in international civilian and military peacekeeping operations, and development co-operation, particularly the strengthening of stability and democracy in the EU's Eastern Partnership countries.
Since the early 1990s, Latvia has been involved in active trilateral
Latvia participates in the Northern Dimension and Baltic Sea Region Programme, European Union initiatives to foster cross-border co-operation in the Baltic Sea region and Northern Europe. The secretariat of the Northern Dimension Partnership on Culture (NDPC) will be located in Riga. In 2013 Riga hosted the annual Northern Future Forum, a two-day informal meeting of the prime ministers of the Nordic-Baltic countries and the UK. The Enhanced Partnership in Northern Europe or e-Pine is the U.S. Department of State diplomatic framework for co-operation with the Nordic-Baltic countries.
Latvia hosted the 2006 NATO Summit and since then the annual Riga Conference has become a leading foreign and security policy forum in Northern Europe. Latvia held the Presidency of the Council of the European Union in the first half of 2015.
On 29 April 2022, in an official ceremony in Vaduz, the Ambassador of the Republic of Latvia to the Principality of Liechtenstein, Guna Japiņa, presented her credentials to His Serene Highness Hereditary Prince Alois of Liechtenstein.
Latvia participates in international peacekeeping and security operations. Latvian armed forces have contributed to
Latvian civilian experts have contributed to EU civilian missions: border assistance mission to Moldova and Ukraine (2005–2009), rule of law missions in Iraq (2006 and 2007) and Kosovo (since 2008), police mission in Afghanistan (since 2007) and monitoring mission in Georgia (since 2008).
Since March 2004, when the
Latvia co-operates with Estonia and Lithuania in several trilateral Baltic defence co-operation initiatives:
- Baltic Battalion (BALTBAT) – infantry battalion for participation in international peace support operations, headquartered near Riga, Latvia;
- Baltic Naval Squadron (BALTRON) – naval force with mine countermeasures capabilities, headquartered near Tallinn, Estonia;
- Baltic Air Surveillance Network (BALTNET) – air surveillance information system, headquartered near Kaunas, Lithuania;
- Joint military educational institutions: Baltic Defence College in Tartu, Estonia, Baltic Diving Training Centre in Liepāja, Latvia and Baltic Naval Communications Training Centre in Tallinn, Estonia.
Future co-operation will include sharing of national infrastructures for training purposes and specialisation of training areas (BALTTRAIN) and collective formation of battalion-sized contingents for use in the NATO rapid-response force. In January 2011, the Baltic states were invited to join Nordic Defence Cooperation, the defence framework of the Nordic countries. In November 2012, the three countries agreed to create a joint military staff in 2013.
On 21 April 2022, Latvian Saeima passed amendments developed by the Ministry of Defence for the legislative draft Amendments to the Law on Financing of National Defence, which provide for gradual increase in the defence budget to 2.5% of the country's GDP over the course of the next three year.
According to the reports by
More than 56% of leading positions are held by women in Latvia, which ranks first in Europe; Latvia ranks first in the world in women's rights sharing the position with five other European countries according to World Bank.
The country has a large ethnic Russian community, which was guaranteed basic rights under the constitution and international human rights laws ratified by the Latvian government.
Latvia is a member of the World Trade Organization (1999) and the European Union (2004). On 1 January 2014, the euro became the country's currency, superseding the Lats. According to statistics in late 2013, 45% of the population supported the introduction of the euro, while 52% opposed it. Following the introduction of the Euro, Eurobarometer surveys in January 2014 showed support for the euro to be around 53%, close to the European average.
Since the year 2000, Latvia has had one of the highest (GDP) growth rates in Europe. However, the chiefly consumption-driven growth in Latvia resulted in the collapse of Latvian GDP in late 2008 and early 2009, exacerbated by the global economic crisis, shortage of credit and huge money resources used for the bailout of Parex Bank. The Latvian economy fell 18% in the first three months of 2009, the biggest fall in the European Union.
The economic crisis of 2009 proved earlier assumptions that the fast-growing economy was heading for implosion of the economic bubble, because it was driven mainly by growth of domestic consumption, financed by a serious increase of private debt, as well as a negative foreign trade balance. The prices of real estate, which rose 150% from 2004 to 2006, was a significant contributor to the economic bubble.
Foreign investment in Latvia is still modest compared with the levels in north-central Europe. A law expanding the scope for selling land, including to foreigners, was passed in 1997. Representing 10.2% of Latvia's total foreign direct investment, American companies invested $127 million in 1999. In the same year, the United States of America exported $58.2 million of goods and services to Latvia and imported $87.9 million. Eager to join Western economic institutions like the
In 2010 Latvia launched a Residence by Investment program (Golden Visa) in order to attract foreign investors and make local economy benefit from it. This program allows investors to get a Latvian residence permit by investing at least €250,000 in property or in an enterprise with at least 50 employees and an annual turnover of at least €10M.
Economic contraction and recovery (2008–12)
The Latvian economy entered a phase of fiscal contraction during the second half of 2008 after an extended period of credit-based speculation and unrealistic appreciation in real estate values. The national account deficit for 2007, for example, represented more than 22% of the GDP for the year while inflation was running at 10%.
Latvia's unemployment rate rose sharply in this period from a low of 5.4% in November 2007 to over 22%. In April 2010 Latvia had the highest unemployment rate in the EU, at 22.5%, ahead of Spain, which had 19.7%.
Paul Krugman, the Nobel Laureate in economics for 2008, wrote in his New York Times Op-Ed column on 15 December 2008:
The most acute problems are on Europe's periphery, where many smaller economies are experiencing crises strongly reminiscent of past crises in Latin America and Asia: Latvia is the new Argentina
However, by 2010, commentators
The strengthening regional economy is supporting Latvian production and exports, while the sharp swing in the current account balance suggests that the country's 'internal devaluation' is working.