RIGA — The Bank of Latvia issued a report Wednesday forecasting that as a result of the current recession Latvia’s economy will contract by a whopping 37 percent and return to the 2004 level of output.

Presenting its bulky macroeconomic review, the bank said that gross domestic product would fall 17.5 percent this year and another 2.5 percent in 2010. Though these forecasts are not new, and largely echo what many analysts in the private sector have been saying, they drive home the sheer breadth of Latvia’s economic collapse — by far the worst in Europe, barring Ukraine.

On the bright side, the bank said that after hitting its nadir in the second quarter of 2010, Latvia’s economy should start quarterly growth in the second half of next year. The bank added, however, that the resilience of any recovery will depend upon external markets; particularly, how well Latvia’s primary trading partners are faring and whether they can make sustainable orders for Latvia’s exporters. The bank also said that the worst is already in the past, though this is unlikely to provide any comfort to the tens of thousands of jobless in the Baltic state.

On Wednesday Eurostat announced that unemployment in Latvia reached 20.7 percent in October, the highest level in the 27-member European Union. To add insult to injury, the number of people without work is expected to continue increasing over the winter.