RIGA, LATVIA

Latvia's economic growth plummeted earlier this year, and the Baltic country continues to be plagued by galloping inflation of nearly 17 percent, the government said Friday.

During the first six months of 2008, growth slumped to 0.2 percent -- down from 10.2 percent growth in the same period in 2007, the statistics office said. It attributed the drop mostly to a fall in the retail trade.

The agency also reported a sharp decline in income from taxes and customs duties.

"In the second quarter of 2008 the slowest economic development in recent years was observed," the agency said in a report.

Latvia's economy has boomed since the country joined the European Union in 2004. Inexpensive, accessible loans also spurred a consumer spending spree. But inflation began to soar in April last year when it was 8.2 percent.

The statistics agency said inflation dropped slightly in July but still remained at an annual 16.7 percent. It hit an all-time high of 17.9 percent in May.