The 2008 Latvian financial crisis, which emerged from the global financial crisis of 2008–2009, was a major economic and political crisis in Latvia.

Latvia is the Eastern European country hardest hit by the global financial crisis. From 2008 to 2010 it lost about 25 percent of its GDP. It was also the most overheated economy before the crisis. However, in the second half of 2010, Latvia returned to economic growth.

Latvia has a population of 2 million and its annual GDP is 23 billion euros (30 billion US dollars). But the problems this Baltic country has faced since 2008, as it pegged its official currency, the lat, to the euro, while sharply tightening fiscal policies, have sparked much controversy among most critics.

Latvia was the subject of intense attention during the financial crisis due to the economic policies it put in place to get its economy back on track. With currency peg retention, internal devaluation adjustments, and frontloading austerity measures, this country of 2 million people is now, five years later, back on a strong economic footing, though it may have been a pain to get there.

Policy makers in Latvia, as elsewhere, reacted too late to the boom; had good relationships with parent banks; managed to avoid a sharp drop in production thanks to deviations from the strict rules of the Monetary Committee; had rapid increases in productivity; and for policy purposes output growth can be at least as important as its level.