Riga  - Latvian President Valdis Zatlers named Valdis Dombrovskis as the troubled Baltic state's likely new prime minister Thursday.

Speaking at Riga castle, Zatlers chose the 38-year-old from the New Era party over regional affairs minister Edgars Zalans of the People's Party, the other candidate remaining in the race after days of political wrangling by Latvia's patchwork of parties.

Dombrovskis must now assemble a workable coalition and get his proposed government approved in a parliamentary vote. Failure to do so would likely see Zatlers return to Zalans or another candidate.

The tasks facing the new prime minister are daunting. After more than a decade of breakneck growth, the Latvian economy plunged into the European Union's deepest recession in 2008, with the government's own forecasts suggesting GDP will shrink by 12 per cent in 2009.

The new leader would also have the matter of a 7.5-billion-euro (9.5-billion-dollar) economic bail-out package from the International Monetary Fund, World Bank, European Union and other bodies to deal with.

Receiving the money is conditional on both broad political consensus and the successful implementation of hard-hitting austerity measures including tax hikes and wage cuts which have inflamed public opinion and ultimately contributed to Godmanis' resignation. (dpa)