In March i wrote that it seems that the economic growth was negative in Latvia in 4th quarter of 2007. The problem in Latvia is that the statistics department there does not publish seasonally adjusted figures.
Lithuania is the first Baltic country to publish its GDP flash estimate for the first quarter of 2008 (Latvia will follow on May 9th and the slow Estonians only on May 14th). And the news aint good from Vilnius - in the first quarter the Lithuanian economy contracted by 0,2% - seasonally and working days adjusted. This is the first quarter of negative growth since 1999. We need to keep in mind that this only the first estimate so it might be significantly adjusted. Also, the usual definition for recession is two consecutive quarters of contraction.
But the news is nevertheless significant. Lithuania has been considered the least overheated economy of the Baltics. And so the expected slowdown should be milder as well. The economic growth in Q4 was 1,3% compared with 0,8% in Estonia and 0,0% in Latvia.
We need to wait to see what it means for the other Baltic States. During Q1 the only good news about the Estonian economy has been remarkable lessening of the deficit in trade balance. Can our export sector really hold up to the high inflation and salary growth?
Lithuania is the first Baltic country to publish its GDP flash estimate for the first quarter of 2008 (Latvia will follow on May 9th and the slow Estonians only on May 14th). And the news aint good from Vilnius - in the first quarter the Lithuanian economy contracted by 0,2% - seasonally and working days adjusted. This is the first quarter of negative growth since 1999. We need to keep in mind that this only the first estimate so it might be significantly adjusted. Also, the usual definition for recession is two consecutive quarters of contraction.
But the news is nevertheless significant. Lithuania has been considered the least overheated economy of the Baltics. And so the expected slowdown should be milder as well. The economic growth in Q4 was 1,3% compared with 0,8% in Estonia and 0,0% in Latvia.
We need to wait to see what it means for the other Baltic States. During Q1 the only good news about the Estonian economy has been remarkable lessening of the deficit in trade balance. Can our export sector really hold up to the high inflation and salary growth?
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