But now the Latvian economy shows clear signs of recovery, with retail sales in August increasing by 1% compared to the previous month and 4.6% compared to August 2009. And industrial production increased 3.5% compared to the previous month and 20.5% compared to August 2009.
While output is still significantly below pre-crisis levels and unemployment still far too high, Latvia's economy is clearly in a recovery. This recovery comes "despite" the fact that Latvia hasn't devalued and implemented tough but necessary austerity measures.
Meanwhile, the government that pushed through the tough these austerity measures was re-elected with a wide margin.
Both of these news will help Latvia bring down the budget deficit and thereby qualify it for entry into the euro area.
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