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By Patrick Lannin and Jorgen Johansson
RIGA, March 11 (Reuters) - Latvia saw its economy shrink 4.6 percent in 2008, the worst performance since 1995, after a jolt downwards of more than 10 percent in the final three months of 2008, data showed on Wednesday.
The head of the statistics office said the first months of this year looked bleak while economists saw a drop in output for 2009 of anywhere between 15 and 20 percent.
In 2007, the economy grew 10 percent due to a consumer boom, but this hit a wall during the credit crunch.
The latest figures confirmed the extent of the economic slowdown that has hit the once-booming European Union nation, which last year had to take a 7.5 billion euro IMF-led financial rescue and which is expecting a 12 percent GDP drop this year.
The figures also showed the tough task awaiting Latvia's next prime minister, Valdis Dombrovskis of the New Era party, who has formed a new government and expects a vote of confidence in parliament on Thursday.
The statistics office, which had earlier estimated the GDP drop in the last three months of 2008 at 10.5 percent year-on-year, said revised calculations showed a slightly smaller drop of 10.3 percent.
"By information we have so far in the first months this year, the situation is very negative. We have to wait and see what will happen to our finances and our tax revenues," said Aija Zigure, statistics office chairwoman.
"It's dark but not totally black," she told a news conference.
In the fourth quarter, private consumption of hotel services and restaurants fell 27.1 percent, shoes and clothes by 25.7 percent and food by 16.1 percent. In the year, consumption, investment and imports and exports also fell strongly.
"According to the figures coming from January and February we are going to be closer to 20 percent (GDP drop this year) in a worst case," said SEB chief economist Andris Vilks.
"It would be a real achievement if we meet that 12 percent (official forecast for GDP this year)."
Swedbank socio-economic expert Peteris Strautinsh said the slowdown was now at its most intense with the trough being hit next year.
"We provisionally expect that this year GDP will fall by about 15 percent," he said.
Latvijas Krajbanka analyst Olga Ertuganova said a 10 percent drop this year was an optimistic scenario.
"Unfortunately, there is not a great deal of hope for that," she added, noting government austerity plans, the EU-wide recession and problems in CIS states. She said the drop could be much worse than 10 percent and saw little improvement next year. (Reporting by Patrick Lannin, editing by Mike Peacock)