RIGA (AFP) - Latvias recession-stricken economy shrank by 19.6 percent in the second quarter of 2009 compared with the same period a year ago, an official estimate showed on Monday. The data from the national statistics office underscored the extent of the crisis in the Baltic state, whose reputation as an economic tiger now seems a distant memory. In the first quarter, Latvias output had fallen by 18.0 percent compared with the same period of 2008, and by 28.7 percent compared with the final quarter of last year. The statistics office did not release data comparing the second and first quarters of 2009. It is due to publish full figures next month. Latvia, which broke free from the crumbling Soviet bloc in 1991, had enjoyed impressive economic growth in recent years after joining the European Union in 2004. Output in this country of 2.3 million people grew 11.9 percent in 2006 and 10.2 percent in 2007, powered by robust domestic demand which was fuelled by easy credit and rising wages. But the economy slammed into reverse last year in the face of rampant inflation and beefed up credit controls, before the global crisis added a further blow. Output contracted by 4.6 percent in 2008 and is forecast to shrink by 18.0 percent this year. That would make Latvia the most recession-hit EU state after neighbouring Lithuania which is expecting a 19.3-percent slump. Last December, Latvia won a 7.5-billion-euro (10.6-billion-dollar) bailout led by the International Monetary Fund and the EU. As part of the deal, the government has introduced austerity measures that include slashing social security and public sector pay. The economic crisis has helped dampen Latvias long-rampant inflation, which had hit a 12-year high point of 17.9 percent in May 2008. In July, the statistics office said, inflation was down to 2.5 percent compared with the same month a year ago. In June the figure was 3.4 percent. Compared with June this year, prices fell 0.6 percent in July, confirming the deflationary trend that began in May, when prices fell 0.5 percent, and continued in June at the same rate. Although it helps consumer pockets, deflation a sustained drop in prices is seen as bad for an economy since it can curb activity further by causing consumers and companies to hold off spending as they wait for better deals.