1. Baltic economic outlook
Timo Hirvonen Senior Economist

2. Weak development in world trade – consumption and services are growing

3. Mixed picture in the global economy
Russia’s recession eases in 2017
China’s growth slows down and relies more on services
Moderate growth continues in the USA
Moderate growth in Europe helped by consumption
Strong growth in India
Recession continues in Brazil
South Africa suffers from the fall in commodity prices

4. ECB monetary policy ultraexpansionary

5. Calm before summer storm?

6. Baltic countries exports to Russia have declined

7. Recession in Russia impacts Baltic countries’ exports

8. Economic growth picture improving

9. Unemployment continues to decline

10. Economic forecasts

11. Better times ahead in the Baltics
Weaker export development slowed down economic growth in the Baltic countries in 2015.
Contracting Russian economy was a drag on exports.
On the back of low inflation and higher employment private consumption was the main driver for economic growth.
Estonia’ s GDP growth will strengthen in 2016.
Low inflation and higher employment will support households’ consumption, the main driver for economic growth. Investment will pick up more strongly in 2017.
Euro area economic growth will support Estonian exports. Russian economy will remain weak.
Higher economic growth in Latvia in 2016.
Also in Latvia private consumption leads the way for GDP growth. Inflation remains low and employment continues to increase.
EU funding programme will spur investments. Export sector has found new markets and better external demand will benefit exports.
Domestic demand the key driver in Lithuania.
GDP growth is supported by domestic demand. Good employment development and low inflation will keep households’ consumption up and running.
Low interest rates and EU-funding will increase investments. Exports to Russia will remain weak, but exports to new markets will strengthen.

12. Twitter: @HirvonenTimo
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13. Recent improvement in confidence indicators in Estonia

14. Diverging development in confidence indicators in Latvia

15. Minor improvements in confidence indicators in Lithuania