OECD predicts Latvia will experience fastest economic growth among Baltic states – Baltic News Network
In its report released on Wednesday, September 8, the Organization for Economic Co-operation and Development (OECD) forecasts that Latvia will experience the fastest economic growth among the Baltic states.
The OECD forecasts that Latvia’s GDP could grow by 3.5% this year.
Next year, the Latvian economy is expected to grow by 1.6%.
The Coordinated Consumer Price Index in Latvia, according to the OECD, will rise by 13.3% this year and 8.6% next year. According to the OECD, the unemployment rate in Latvia will rise to 7.2% this year and 7.4% next year.
The OECD notes that Latvia’s export growth will slow due to the consequences of the war in Ukraine, the shortage of raw materials and weak economic activity in Europe. However, strong demand for some Latvian goods, including timber and foodstuffs, will slow this decline. Inflation will remain high, reducing real wages and residents’ private consumption.
The development of foreign demand will contribute to a slight increase in unemployment.
For Lithuania, the OECD predicts the second fastest economic growth among the Baltic states with growth of 1.8% this year and 1.6% next year. This year, consumer price inflation in Lithuania is expected at 15.6%, while next year the increase is expected at 7.9%. Unemployment in Lithuania, according to OECD estimates, will be 7.2% this year and 7.4% next year.
Also read: Inflation in Latvia reaches 16.9% in May
For Estonia, the OECD predicts GDP growth of 1.3% this year and 1.8% next year. Consumer price inflation is estimated at 14.5% this year and 10.9% next year. The outlook mentions that unemployment in Estonia will be 7.1% this year and 8.3% next year.
The OECD lowered this year’s global economic outlook to 3% from 4.5% expected in December 2021. The organization noted in addition to the report that “the world will pay a high price for the invasion of Ukraine by Russia”. The level of economic slowdown and inflation growth will depend on the war, but it is already clear that the poorest countries will suffer the most.
For the eurozone economy, the OECD forecasts GDP growth of 2.6% for this year and 1.6% for 2023.
The German economy is expected to grow by 1.9% this year and 1.7% next year.
For the United States, the OECD forecasts GDP growth of 2.5% for 2022 and 1.2% for 2023.