WASHINGTON, DC - The Latvian economy has suffered the worst two-year decline in output on record and will have trouble recovering with its currency tied to the euro, according to a new report from the Center for Economic and Policy Research.

The report, “Latvia’s Recession: The Cost of Adjustment With An ‘Internal Devaluation’”, argues that maintaining the fixed exchange rate has prevented the government from adopting the necessary macroeconomic policies to exit from the world’s worst recession.