Recently in Latvia there were essential changes in structure of economic system. Often in the given conditions traditional statistical, econometric methods aren't capable to specify ways of further de-velopment. Research objective is to develop model of economic integration of Latvia in EU. Article nov-elties are related both with application of system dynamics method and with study of integration process-es in EU. The developed model considers basic elements of international economy and principles of EU: free goods and capital movements, migration, contributions and grants in EU; and as their influence on economic development of the state. Results of model show both positive and negative influence of inte-gration process on economic development of the state. The developed model can be applicable for analysis of economic situation in other EU countries too.