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tokie straipsniai turbut geriausia imanoma reklama valstybei
Baltic Economies May Be EU's Fastest Growing, Survey Shows
Oct. 6 (Bloomberg) -- The Baltic economies of Lithuania, Latvia and Estonia may be the fastest growing in the European Union this quarter, spurred by foreign investment, bank lending and EU financial aid, a survey of economists showed.
The combined $40 billion Baltic economy may grow an annual 7.1 percent in the current quarter, according to the median estimate of seven economists surveyed by Bloomberg, compared with 7.1 percent in the second. The three former Soviet republics, sandwiched between the Baltic Sea, Poland and Russia, have together outpaced the other countries that joined the EU May 1.
Foreign companies seeking lower operating costs and wages are spurring growth. The biggest U.S. cigarette maker Philip Morris, a unit of Altria Group Inc., said on June 29 it will spend $20 million to quadruple output at its Lithuanian factory. NordLB Latvija, the Latvian unit of Norddeutsche Landesbank Girozentrale, said last month it will sell new shares to raise money for expansion in the Baltic region.
``There's little doubt the Baltics as a region will have the best EU growth again,'' said Maris Lauri, head of analysis at Hansabank, the biggest Baltic lender, in the Estonian capital Tallinn. ``The only question is whether Poland or someone else won't overtake Estonia for third place.''
All eight of the Eastern European entrants that joined the EU this year are outperforming economies in Germany, France and the euro region as a whole.
Regional Growth
Second-quarter gross domestic product growth in Poland, Slovakia, Slovenia, Czech Republic, Hungary and the Baltic states exceeded 4 percent year-on-year, more than any of the 15 older EU members, which grew a combined 2.3 percent in the period.
This quarter, Lithuania may post growth of 7.7 percent, Latvia may expand 7.3 percent and the economy of Estonia, the smallest, may grow 5.7 percent, according to the survey.
Household demand has soared in the Baltic nations as wages rose. Consumers have borrowed to buy imported Toyota Motor Corp. cars and Royal Philips Electronics NV televisions, and to invest in property.
The average monthly wage in Lithuania rose 5 percent in the second quarter from a year earlier to $435. In Latvia, the average rose 9 percent to $387 and in Estonia by 7.3 percent to $582. That compares with about $4,590 in Germany, attracting to the Baltics companies including Altria, E.ON AG, Germany's largest utility, and SEB AB, Scandinavia's third-largest bank.
Slowing Consumption
Growth in household consumption may slow if interest rates rise as expected, according to Gitanas Nauseda, chief economist at SEB's Vilniaus Bankas in the Lithuanian capital Vilnius. That will be offset by $1 billion of EU financing to improve roads and railways and raise environmental standards, he said.
``I'd predict a slowdown in all three countries if it weren't for EU aid, which is a sort of doping that will bolster the Baltic economies,'' Nauseda said. Still, bank lending and retail sales also will continue to support growth until living standards get closer to Western European levels, he said.
Latvian GDP per capita was 42 percent of the EU average last year, the lowest among the accession countries, according to Eurostat. Lithuania and Poland had the next lowest, at 46 percent, followed by Estonia at 48 percent.
``Structural reasons suggest these countries could grow two to three times faster than the EU average for 10 or 15 years,'' Nauseda said. ``That doesn't mean they couldn't have occasional problems due to external shocks of bad policies.''
Long-Term Concerns
Widening current-account deficits and a jump in inflation this year have made Baltic central banks and investors concerned about economic imbalances and longer-term growth prospects.
``The rapid economic growth we expected in this region has occurred,'' said Saulius Bilys, the representative in Lithuania of E.ON, in a phone interview. The German utility owns stakes in natural gas companies in all three Baltic nations. ``The question now is can they keep it up. It will take a determined effort on the part of policymakers.''
In Estonia, surging imports pushed the current-account deficit to a record 20 percent of GDP in the second quarter. In Latvia, the annual inflation rate rose to a seven-year high of 7.8 percent in August after the government increase spending.
Central Banks
The Bank of Latvia raised its key refinancing rate in March and in July raised the reserve requirement for banks in a bid to slow lending. Estonia's central bank has warned banks about the risks of households becoming vulnerable to higher borrowing costs and urged the government to end tax breaks for housing loans.
Lithuanian officials are also watching the inflation rate, which rose to a two-year high of 2.2 percent in August, and the current-account gap, which widened 43 percent in the second quarter from a year earlier to 10.9 percent of GDP.
``What's unique about Lithuania is that, so far, none of its indicators are at a level that would cause serious concern,'' said Vilniaus Bankas's Nauseda.
tokie straipsniai turbut geriausia imanoma reklama valstybei
Baltic Economies May Be EU's Fastest Growing, Survey Shows
Oct. 6 (Bloomberg) -- The Baltic economies of Lithuania, Latvia and Estonia may be the fastest growing in the European Union this quarter, spurred by foreign investment, bank lending and EU financial aid, a survey of economists showed.
The combined $40 billion Baltic economy may grow an annual 7.1 percent in the current quarter, according to the median estimate of seven economists surveyed by Bloomberg, compared with 7.1 percent in the second. The three former Soviet republics, sandwiched between the Baltic Sea, Poland and Russia, have together outpaced the other countries that joined the EU May 1.
Foreign companies seeking lower operating costs and wages are spurring growth. The biggest U.S. cigarette maker Philip Morris, a unit of Altria Group Inc., said on June 29 it will spend $20 million to quadruple output at its Lithuanian factory. NordLB Latvija, the Latvian unit of Norddeutsche Landesbank Girozentrale, said last month it will sell new shares to raise money for expansion in the Baltic region.
``There's little doubt the Baltics as a region will have the best EU growth again,'' said Maris Lauri, head of analysis at Hansabank, the biggest Baltic lender, in the Estonian capital Tallinn. ``The only question is whether Poland or someone else won't overtake Estonia for third place.''
All eight of the Eastern European entrants that joined the EU this year are outperforming economies in Germany, France and the euro region as a whole.
Regional Growth
Second-quarter gross domestic product growth in Poland, Slovakia, Slovenia, Czech Republic, Hungary and the Baltic states exceeded 4 percent year-on-year, more than any of the 15 older EU members, which grew a combined 2.3 percent in the period.
This quarter, Lithuania may post growth of 7.7 percent, Latvia may expand 7.3 percent and the economy of Estonia, the smallest, may grow 5.7 percent, according to the survey.
Household demand has soared in the Baltic nations as wages rose. Consumers have borrowed to buy imported Toyota Motor Corp. cars and Royal Philips Electronics NV televisions, and to invest in property.
The average monthly wage in Lithuania rose 5 percent in the second quarter from a year earlier to $435. In Latvia, the average rose 9 percent to $387 and in Estonia by 7.3 percent to $582. That compares with about $4,590 in Germany, attracting to the Baltics companies including Altria, E.ON AG, Germany's largest utility, and SEB AB, Scandinavia's third-largest bank.
Slowing Consumption
Growth in household consumption may slow if interest rates rise as expected, according to Gitanas Nauseda, chief economist at SEB's Vilniaus Bankas in the Lithuanian capital Vilnius. That will be offset by $1 billion of EU financing to improve roads and railways and raise environmental standards, he said.
``I'd predict a slowdown in all three countries if it weren't for EU aid, which is a sort of doping that will bolster the Baltic economies,'' Nauseda said. Still, bank lending and retail sales also will continue to support growth until living standards get closer to Western European levels, he said.
Latvian GDP per capita was 42 percent of the EU average last year, the lowest among the accession countries, according to Eurostat. Lithuania and Poland had the next lowest, at 46 percent, followed by Estonia at 48 percent.
``Structural reasons suggest these countries could grow two to three times faster than the EU average for 10 or 15 years,'' Nauseda said. ``That doesn't mean they couldn't have occasional problems due to external shocks of bad policies.''
Long-Term Concerns
Widening current-account deficits and a jump in inflation this year have made Baltic central banks and investors concerned about economic imbalances and longer-term growth prospects.
``The rapid economic growth we expected in this region has occurred,'' said Saulius Bilys, the representative in Lithuania of E.ON, in a phone interview. The German utility owns stakes in natural gas companies in all three Baltic nations. ``The question now is can they keep it up. It will take a determined effort on the part of policymakers.''
In Estonia, surging imports pushed the current-account deficit to a record 20 percent of GDP in the second quarter. In Latvia, the annual inflation rate rose to a seven-year high of 7.8 percent in August after the government increase spending.
Central Banks
The Bank of Latvia raised its key refinancing rate in March and in July raised the reserve requirement for banks in a bid to slow lending. Estonia's central bank has warned banks about the risks of households becoming vulnerable to higher borrowing costs and urged the government to end tax breaks for housing loans.
Lithuanian officials are also watching the inflation rate, which rose to a two-year high of 2.2 percent in August, and the current-account gap, which widened 43 percent in the second quarter from a year earlier to 10.9 percent of GDP.
``What's unique about Lithuania is that, so far, none of its indicators are at a level that would cause serious concern,'' said Vilniaus Bankas's Nauseda.
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