Swedbank Macro Research

Baltic Archive

A list of the Baltic publications in English for the last two years.

Macro Focus
May 6, 2021
Coronavirus briefing: Positive signs on Moderna’s booster shot
The epidemicCases in the EU continue to fall, and the trends remain down in France, Germany, and Italy. Cases are also declining across Eastern European countries such as Czech Republic, Poland, and Hungary. Cases in India continue to rise rapidly ..
Macro Focus
May 3, 2021
Coronavirus briefing: Continued improvement in Sweden
The epidemicThe number of coronavirus cases continued to decline in the EU. Among the biggest EU countries, cases have fallen in France and Germany, and point slightly down in Spain and Italy. Vaccinations have accelerated further.In the US, the nu..
Flash comment: Lithuania
April 30, 2021
Lithuania leaves the recession behind
Economy expands 1% annually in Q1Manufacturing and retail trade push economy forward Lithuanian economy spent almost the whole quarter under tight quarantine restrictions and yet managed to grow, defying expectations. Solid performance i..
Flash comment: Latvia
April 29, 2021
Latvia: Q1 GDP hit by the virus once again
Flash estimate suggests that the GDP in Q1 2021 contracted in line with expectations - by 2.6% with respect to the previous quarter, and by 2.2% in YoY terms. Fall registered in producing sectors (-1.3%) is less pronounced than in services (-4%). C..
Macro Focus
April 29, 2021
Coronavirus briefing: Cases continue to fall in Europe
The epidemicIn Europe, cases continue to point down.In the US, the infection trend continues to move slowly downwards, and hospitalizations seems to be falling now too.The situation in India is very severe. On Wednesday, India reported record numbe..
Macro Focus
April 29, 2021
The beginning of a greener and more inclusive recovery?
Recent data indicate the Euro area has entered expansion territoryEurope finally takes important steps towards its climate goalsDraghi needs to prove that fiscal integration works In March the Euro area economy stabilized and now the Flash P..
Macro Focus
April 26, 2021
Coronavirus briefing: Cases soaring in India
The epidemicIn Europe, the number of cases has continued declining.In the US and Brazil, the amount of cases has moved slightly downwards.The surge in coronavirus cases in India continues, overwhelming the country’s healthcare system. The Covid-19 ..
Macro Focus
April 22, 2021
Coronavirus briefing: The EMA endorses Janssen vaccine
The epidemicEU cases continued to decline. Cases continue to move sideways in France and slightly down in Italy and Spain but are rising in Germany and the Netherlands. Cases continue to rise extremely fast in India, while they are moving sideways ..
Macro Focus
April 19, 2021
Coronavirus briefing: Concern mounts over the Indian “double mutation” strain
The epidemicTotal EU cases declined slightly after a previous rebound. Cases have moved sideways in France and Italy and show some stabilisation in Germany, after a previous increase.US cases have continued to rise slowly, while deaths seem to have..
Macro Focus
April 16, 2021
ECB preview: wait and see mode
Economic developments have been slightly better than expected in March and April.We expect the ECB to keep its main policy instruments unchanged.The manufacturing sector continues to be a forceful engine for the euro area recovery. In April manufac..
Macro Focus
April 15, 2021
Coronavirus briefing: Sweden paused the planned rollout of J&J vaccine
The epidemicOverall cases in the EU and the UK point down again, but they are increasing in Poland, Germany, and the Netherlands.There is a modest increase in daily cases in the US, while deaths have moved sideways.India’s coronavirus surge continu..
Macro Focus
April 13, 2021
Coronavirus briefing: Cases in India continue to surge
The epidemicGlobally, cases continue to climb, driven by the surge in India. The total tally in India, is now highest in the world.In the EU, daily cases point slightly up again, after a decline during the Easter.In the UK, cases continue to declin..
Macro Focus
April 8, 2021
Coronavirus briefing: The EMA said blood clots should be listed as a rare side effect of the Astra Zeneca jab
The epidemicIn the EU, the infection curve is moving downwards, but Ester effects may still affect the figures.In the UK, cases, hospitalizations, and deaths have all continued to fall. So far, at least 47% of the population has had at least one sh..
Flash comment: Estonia
April 8, 2021
Inflation has accelerated in Estonia
• In March, in Estonia, consumer prices rose by 1.1%, over the year. • Higher prices of motor fuels, food, and electricity contributed. • Swedbank expects inflation to reach 1.5% in 2021 and 2.0% in 2022. Annual inflation has accelerated from 0..
Macro Focus
April 8, 2021
Swedish economy – resilient so far
Data until February suggest a more than decent start of the year. In February, following an improvement in January, household consumption rose by an additional 2% over the month. Spending on housing contributed the most, while spending on restauran..
Macro Focus
April 6, 2021
Coronavirus briefing: China’s vaccinations pick up pace
The epidemicReported cases in the EU have declined, but the data must be interpreted with caution as Easter holiday effects may affect the figures. In the UK, both daily cases and deaths have declined further.In the US, daily cases reported over th..
Macro Focus
April 1, 2021
Coronavirus briefing: France enters its third lockdown
The epidemicEU and UK cases have declined slightly in recent days, but this could be affected by reporting issues. Cases have risen in Poland, the Netherlands, Austria, and Germany.In the US, cases are rising again and the decline in deaths has sta..
Macro Focus
April 1, 2021
2020: The year we stayed home
Tourism below 2012 levels in Baltics, yet fast route to recovery in sight2020 was ruinous for tourism, with millions around the world in lockdownThe blow in the Baltics was softened by local tourism Vaccination seems to clear the route to recovery ..
Macro Focus
March 30, 2021
Nordic Macro Monthly: A defining quarter is approaching
The pandemic situation has worsened in recent weeks and lockdown measures are on the rise.But the Nordic economies, including the labour markets, have shown resilience so far.
Macro Focus
March 25, 2021
What’s up, Europe? - A Recovery Delayed, but not Derailed
The European economy is waking up from its hibernationECB steps up stimulus signalling this is not the time for tightening of financial conditionsPolitical shifts have both upside and downside risks, but could even result in deeper integration..
Baltic Housing Affordability Index
March 16, 2021
Strong market activity in Baltic capitals at the end of 2020
Despite the rollercoaster during the year 2020 caused by the global pandemic, housing remained affordable in all three Baltic capitals. After severely damaged market activity during the first wave of the pandemic, the end of the year brought a spec..
Macro Focus
March 15, 2021
The green taxonomy: a driver for the transition
New EU disclosure rules will reduce greenwashing and speed up the green transition Modest effects on rates in the short term, but large impact in the long run Green trends boosted in the Nordics; direct effects in the Baltics will be smaller The EU..
Macro Focus
March 8, 2021
ECB preview: more open mouth operations, but only that?
Economic divergence continues in services and manufacturing.Inflation lifts its head and we expect annual inflation to reach 1.5% in 2021.ECB is likely to emphasize that the PEPP is flexible and that asset purchases are front-loaded.We do not expec..
Flash comment: Estonia
March 3, 2021
Average wage increased but less than before the crisis
In the fourth quarter, in Estonia, average gross wage amounted to 1515 euros, up by 2.9%, over the year. In 2020, the average wage increased by 2.9%, too. That is much less than before the crisis, for example, in 2015-2019, the average gross wage r..
Flash comment: Latvia
March 2, 2021
Wage growth still rapid in Latvia despite higher unemployment in 2020
Average wage up 6.2% in 2020 - only slightly slower than in 2019.Total wages rose more slowly than average wage, reflecting reduced working hours and job shedding.Most sectors saw slowdown, while only a few recorded a decline. Average wage growth r..
Flash comment: Estonia
March 1, 2021
The Estonian economy is recovering from the crisis
In 2020, Estonian GDP fell by 2.9% in real terms and 3.4% in nominal terms. The result was close to our expectations – our forecast, published in January, was -2.7%. In addition, GDP results for the first three quarters were revised down by 1.1 pp...
Flash comment: Latvia
February 26, 2021
Latvia: GDP in 2020 down by 3.6%
GDP in Q4 grew 1.1% vs Q3. The economy was 1.5% behind last year’s level.GDP in 2020 fell by 3.6% - a slightly worse result than the flash estimate suggestedMain negative contributor in Q4 and the whole year was private consumption, while export pe..
Macro Focus
February 26, 2021
2nd wave of COVID-19 – bad, but better than last spring
The dire epidemiological situation in Baltics and ensuing restrictions caused a steep fall in card spending at the start of 2021. However, the fall overall is less pronounced than in spring. Total transactions are down 10% in Lithuania and Estonia,..
Macro Focus
February 25, 2021
Nordic Macro Monthly: The turnaround is close, but downside risks dominate
The Nordic economies stand strong and pre-crisis GDP levels are within reach.The pandemic still threatens the recovery as mutation variants spread and vaccination lags.Special theme: Targeted and timely support to businesses remains crucial.Fiscal ..
Flash comment: Latvia
February 24, 2021
Latvia: Unemployment rate declined in Q4 despite virus resurgence
Unemployment rate down to 7.9% in Q4, but recent months have seen growing ranks of the unemployed.Part of the rise is seasonal, but effect of restrictions to economic activity is evidently increasing.Government support is becoming more and more gen..
Flash comment: Estonia
February 15, 2021
The unemployment rate was 7.4% in the fourth quarter in Estonia
In the fourth quarter of 2020, in Estonia, employment shrank by 2.8%, over the year, and the unemployment rate amounted to 7.4%, somewhat less than the 7.7% in Q3. The number of the unemployed increased by 24,000, in a year. In 2020, employment d..
Macro Focus
February 2, 2021
ECB Update: Italian bonds not over-represented in December-January purchases
Data on PEPP transactions in December and January show a clear decline in QE purchases. In December-January, the total net purchases in the PEPP was 110 bn euros, roughly 23 bn less than in October-November and far below top levels seen during summ..
Flash comment: Latvia
February 1, 2021
Latvia: Q4 GDP surprises on the upside
GDP in Q4 2020 increased by 1.1% over the previous quarterThe economy was just 1.4% below levels of the final quarter of 2019, also known as the pre-crisis level The virus crisis has resulted in a fall in GDP of 3.5% in 2020. A markedly better resu..
Flash comment: Lithuania
January 29, 2021
Lithuania dodges double-dip recession
Economy expands 1.2% q/q in Q4In 2020 economy shrinks only 0.9% Lithuanian economy defied expectations yet again. Despite spending most of the quarter under restrictions to economic activity, Lithuania managed to achieve quarterly economic g..
Macro Focus
January 21, 2021
ECB comment: Flexibility is the word of the day
Today’s ECB meeting was uneventful, which was expected.No policy changes, but clear emphasis on flexibility and readiness to adjusts measures if needed.After a decision-packed December meeting, there were no expectations about today’s ECB meeting, ..
Macro Focus
January 13, 2021
Synchronized cooling
Economies cooled at the fastest rate in a decadeWeaker labour markets and inflation are the primary drivers of cooling Unsurprisingly, temperature of the Baltic economies dropped rapidly due to the massive pandemic shock. In all three cou..
Flash comment: Latvia
January 11, 2021
Deflation Continues in December
Prices of goods decrease by 1.4%Prices of services increase by 1.6% Average price of services keeps increasing in Latvia at a diminishing rate. Average price of goods continues to decrease due to lack of demand caused by coronavirus restrictions.
Flash comment: Estonia
January 8, 2021
Consumer prices down by 0.4% in 2020
Last year's deflation was caused by sluggish demand and a decline in taxes.Inflation should return in the second quarter this year. Consumer prices decreased by 0.4% in Estonia in 2020, one of the weakest price recordings in the euro area. Prices ..
Macro Focus
January 4, 2021
Macro Focus: UK trade post-Brexit and consequences for the economy
Tariff-free trade with the EU, but non-tariff barriers will be significant.Limited short-run effects on EU-UK trade despite initial disruptions.Third-country deals may partially offset reduced trade, but resumed EU talks will be key.On Christmas Ev..
Macro Focus
December 17, 2020
Remote work. How does it affect us in the Baltics?
Our survey results suggest that around one-half of currently remotely working persons had no telework experience before the Covid-19 crisis hit.Productivity losses were reported by about one-third of respondents, while less than one-fifth managed t..
Macro Focus
December 16, 2020
Euro area PMI. Surprise outperformance brought an early Christmas present
Composite PMI bounces back to 49.8 Industry continues outperforming Services improve substantially despite restrictions December brought a welcome surprise. Flash estimate showed recovering economic activity levels in Europe. It could mean that t..
Baltic Housing Affordability Index
December 15, 2020
Baltic HAI - Respite for the Housing Market
Third quarter marks a recovery in the housing market Housing affordability remained high throughout the three quarters of 2020. In the third quarter, housing affordability increased in Estonia (+2.8) and Latvia (+4.1), while decreasing in Lithuania..
Flash comment: Latvia
December 8, 2020
Deflation continues
Average price level drops by 0.7% in NovemberPrices of goods decrease by 1.6% Prices of services increase by 1.4% While services keep increasing at a slower rate in November, goods have experienced a decrease of average price level by 1.6% caused b..
Macro Focus
December 8, 2020
The Three-Body Problem of Monetary Policy
Innovative use of QE, policy rates, and TLTROs will going forward be key tools for the ECB The monetary toolkit has expanded massively in the past decade; the focus will be on how the tools interact, which will offer more opportunities to fine-tune..
Macro Focus
December 3, 2020
Nordic Macro Monthly: Pent up demand will boost Nordics towards summer
The Nordic economies are struggling with the consequences of the Corona pandemic, but so far, the region’s resilience has been surprisingly strongGDP growth this year will fall in all the Nordics by around 4%, much less than in most other developed..
Flash comment: Latvia
November 30, 2020
Latvia: GDP in Q3 up strongly
GDP recovered by 7.1% QoQ, but was still down by 2.6% YoY in Q3 2020.Growth was boosted by strong recovery in private consumption and exports, albeit remaining under last year’s levels. Value added improved notably in catering and accommodation, as..
Flash comment: Estonia
November 30, 2020
Estonian economy rebounded rapidly in the third quarter
In the third quarter of 2020, Estonian economy dropped by 1.9% y/y in real terms (seasonally and working day non-adjusted). Seasonally and working day adjusted GDP rose by 3.3% q/q. The result was close to our expectations. In the first three quart..
Flash comment: Estonia
November 27, 2020
Wage growth accelerated a bit in the third quarter in Estonia
Gross wage growth accelerated from 1.0% in the second quarter to 3.1% in the third quarter, over the year, as economic activity increased, and the government’s wage support programme ended (substantially lower wages was one of the indicators to qua..
Flash comment: Lithuania
November 26, 2020
Wages are seemingly unfazed by the pandemic
Gross wages up 10.4% annually in Q3Low earners more often drop out of the labour market Wage growth in Lithuania has been particularly strong given the precarious situation in the global economy. After the slowdown in the 2nd quarter in..
Macro Focus
November 23, 2020
Transactions: further to the downside
Card spending and cash withdrawal in the Baltics somewhat declined as virus case count surged. However, transactions are still holding up better than during the first wave.Card spending and cash withdrawal in Q4 has increased by 3.7% YoY in Lithuan..
Macro Focus
November 18, 2020
Macro Focus - Brexit briefing
Negotiations have entered a critical phase, while disagreements persistAn agreement remains our baseline scenario, but the risk of a no-deal lingersTime for reaching a deal is running out, as ratification of an agreement is required A trade deal is..
Flash comment: Estonia
November 13, 2020
Unemployment rate increased in the third quarter in Estonia
• The unemployment rate increased in the third quarter in Estonia and is expected to rise further during the winter months. According to Statistics Estonia, employment fell by 3.6% in the third quarter, over the year, mostly in the services’ sect..
Flash comment: Latvia
November 9, 2020
Deflation is still here
The average price level fell by 0.7% over a year in October. Goods’ prices decreased by 1.6%, but prices of services grew by 1.5%. The main inflation limiting factors were transport related costs (due to low fuel prices), and housing related costs,..
Macro Focus
November 4, 2020
US Election 2020: Market becomes rosier as Biden seems to take the lead
Looks like a “blue shift” is comingVolatile day in the marketsCounting will continue in the days to come
Macro Focus
November 4, 2020
US Election 2020: Initial results show that it’s too close to call
No matter what, Trump has done a surprisingly strong electionThe financial markets are awaiting a resultEconomic implications to depend on the President & Congress races
Macro Focus
November 2, 2020
US Election 2020: Bidenomics would give short-run growth boost
Joe Biden’s economic plan is expected to lift GDP growth in the years to come… but the plan would also come with some long-run risks.From a global and regional perspective, the Biden policy would be more predictable.In this analysis, we dig further..
Macro Focus
November 2, 2020
US Election 2020: The election night
The US election night will keep many people busy. The opening and closing times for polling stations differ across the country and some initial results (e.g. Florida) may be more important to look at. If the race is very tight, it could take days, ..
Flash comment: Lithuania
October 30, 2020
Lithuania: as expected, strong recovery in Q3
GDP in Q3 2020 grew by 3.7% compared with the previous quarter and was 1.7% below last year’s levelQuickly worsening epidemiological situation casts gloom on recovery – Q4 is likely to be weaker, but nowhere near as bad as the second quarter GDP ..
Flash comment: Latvia
October 29, 2020
Latvia: strong bounce-back in Q3
GDP in Q3 saw very strong growth, but more is required to recoup last year’s levels GDP in Q3 2020 up by 6.6% over the previous quarter, but still 3.1% behind levels of last year The spread of the virus casts gloom on recovery – Q4 is likely to s..
Macro Focus
October 26, 2020
The share of the Baltic countries’ export is growing in Europe
Exports have been recovering from the spring trough in all the Baltic countries Increased net exports have softened the drop of GDP, especially in Lithuania Baltic countries have gained market shares of their exported goods in the EUExports from al..
Macro Focus
October 21, 2020
Russia: A solid recovery, but the risks remain on the downside
In this crisis, the Russian economy had to confront two shocks at the same time – the coronavirus outbreak and the steep decline in oil prices caused by the pandemic.The slump in oil prices and oil production cuts have led to a decline in Russia’s ..
Macro Focus
October 19, 2020
US Election 2020: Prepare for a change in the White House
Our base case is a Joe Biden victory and a Democratic clean sweep… …but much can still happen, and absentee voting will increase a lot.Likelihood of major political turbulence is low, but would affect financial markets most.The US election is comin..
Flash comment: Estonia
October 7, 2020
Deflation continued in September
• Deflation amounted to 1.1% in Estonia in September, over the year. • We expect prices to decline by 0.4% in 2020. In September, the fall in consumer prices deepened from 0.9% in August to 1.1% in September. Food prices increased less than befor..
Macro Focus
September 21, 2020
Finland: Only small corona effects on the housing market so far
Surprisingly small effects from the corona outbreak on construction activity in Finland.Stimulating monetary policy continues to boost supply through cheap funding costs for constructors and demand both through the cheap funding channel and lack of..
Baltic Housing Affordability Index
September 17, 2020
Housing Affordability Index tells a different story this time
During the second quarter of 2020, the Baltic economies, like the rest of the world, were hit by the corona crisis. In the housing markets of the Baltic capitals, it was the secondary market that bore the brunt of pandemic damage. There was a drop ..
Flash comment: Latvia
September 8, 2020
Deflation is back
Prices of goods are down by 1% Prices of services rose by 1.6% While the price growth of services remained stable, the price growth of goods back to the negative territory due to cheaper fuel.
Flash comment: Latvia
September 1, 2020
Latvia: Wages up in Q2 despite pandemic
Wage growth slowed, but remained in positive territory, at 3.9% y/y in Q2Most sectors saw slowdown, while only a few recorded a declineWages picked up at a similar annual pace in both public and private sector Despite a substantial slump in economi..
Flash comment: Latvia
August 31, 2020
Latvia: plummeting consumption drags down GDP
GDP down by 8.9% YoY in Q2 2020, and by 5.4% in the first half of 2020Growth during crisis dragged down chiefly by private consumption Value added fell the most in catering and accommodation, arts and recreation and transport The second reading of ..
Flash comment: Lithuania
August 31, 2020
A dip rather than collapse
Quarterly rate revised down to -5.5%Economy contracted only 4.2% y/yExternal sector cushioned the impact As more data rolls out the extent of economic damage caused by the pandemic is revealed. Second quarter performance of Lithuanian econom..
Flash comment: Estonia
August 31, 2020
Flash comment: Estonia - Economy dropped less than expected in Q2
Estonian economy dropped less than expected in Q2In the second quarter of 2020, Estonian economy dropped by 6.9% y/y in real terms and 8.4% in nominal terms. Seasonally and working day adjusted GDP dropped by 5.6% q/q. The result exceeded our expec..
Flash comment: Estonia
August 27, 2020
Wage growth decelared
• The average gross wage increased by only 1.0%, over the year, in the second quarter. • Swedbank expects wages to grow by 2.2% this year. Less work means lower pay Gross wage growth decelerated from 4.8% in the first quarter to 1.0% in the seco..
Macro Focus
August 27, 2020
No green recovery so far
Green investments account only for a tiny share of global stimulus announced so far. Announced green stimulus in our home markets ranges from around 2 % of GDP in Denmark to 0.02 % in Sweden, where more is expected. Equally important to avoid suppo..
Macro Focus
August 24, 2020
No big drama in Lithuanian trade. Why so?
On the back of strong momentum, the coronavirus crisis did not significantly affect Lithuanian exports, which dropped by 2.4% (excluding mineral products) during the first six months of 2020. Food and fertiliser production, which constitute a big s..
Flash comment: Latvia
August 17, 2020
Latvia: Labour market worsens less than expected in Q2
Unemployment rate up to 8.6% in Q2, less than expectedEmployment down by 1.5% y/yWeakest point in the labour market likely behind us Despite a record quarterly drop in economic activity, the worsening in the labour market in Q2 was smaller than we ..
Flash comment: Estonia
August 14, 2020
Situation in the labour market has deteriorated in Estonia
• The unemployment rate increased moderately in the second quarter but has been stable since then.• We expect the unemployment rate to reach around 8% this year and then decrease again next year. According to Statistics Estonia, employment fell ..
Flash comment: Latvia
August 10, 2020
Inflation is back
In July, price change of goods came out of negative territory that led to 0.5% annual inflation in Latvia. Prices of goods did not change. Prices of services rose by 1.6%.In 2020 inflation could remain low – in 7 months prices rose by only 0.7%.
Macro Focus
August 10, 2020
China: A solid but uneven recovery while big risks remain
Recovery led by industry and exportsGDP growth surprised on the upside in Q2, supported by net exports and inventories. Exports have been boosted by medical products and electronics, as China produces many of the goods necessary in a pandemic. Tota..
Flash comment: Latvia
July 31, 2020
Latvia: Bad, but in line with expectations
GDP down in Q2 2020 by 9.8% YoY and 7.5% over the previous quarterRecovery was rapid right after the relaxation of measures, but expected to lose strength as global growth disappointsGDP in Q2 declined in line with forecasts, following a sharper-th..
Flash comment: Lithuania
July 30, 2020
GDP drops only 3.8% in Q2
It seems as if someone forgot to inform Lithuanian economy that economic crisis of a century is ravaging the global economy. Lithuanian Real GDP dropped barely 3.8% in annual terms, beating all estimates by a wide margin. It was evident from..
Flash comment: Latvia
July 8, 2020
In June, prices down by 0.7%
Prices of goods fell by 1.6% Prices of services rose by 1.3% The spread of coronavirus in Latvia is well controlled and the restrictions introduced in March were eased quite quickly. Therefore, the situation with price changes is starting to stabil..
Macro Focus
June 23, 2020
Macro Focus - Swedbank’s Sustainability Indicators show more progress is needed. Will EU’s recovery fund help in reaching targets?
Environmental protection area remains pivotal in speeding up progress – no country is on track to meet environmental goals in UN 2030 Agenda. All Nordic countries perform well on governance and institutions, whereas the Baltics have a lot of catchi..
Macro Focus
June 18, 2020
Rail Baltica lifts construction volumes
The construction of the new railway will have a substantial impact on the Baltic economies,boosting demand for construction materials and services, even when many goods and services are imported. The new fast railway line from Estonia’s capital to ..
Baltic Housing Affordability Index
June 10, 2020
Will high affordability save the market?
At the start of 2020, the housing market in the Baltics was still unfazed by the pandemic. Overall housing affordability was high in all the capitals. However, housing affordability in Tallinn and Vilnius decreased in the first quarter, compared wi..
Flash comment: Latvia
June 8, 2020
Deflation is here: Prices down by 0.6%
Prices of goods fell by 1.6% Prices of services rose by 1.8% Despite the signs of weakness prices of services maintained the positive rate of change. But prices of goods plunged deeper in the negative area. Prices of transport decreased significant..
Flash comment: Latvia
May 29, 2020
Latvia: private consumption dragged down Q1 GDP
GDP down in Q1 2020 by 1.5% YoY, and 2.9% QoQ Growth dragged down by private consumption Value added fell the most in transport as well as arts and recreationThe second reading of GDP figures was little changed from the flash estimate.Swedbank expe..
Flash comment: Estonia
May 29, 2020
The steep decline in taxes contracted Estonian GDP in the first quarter
In Estonia, GDP contracted 0.7% yoy (non-adjusted) and 3.7% qoq (seasonally and working day adjusted) in 1QThe steep fall in VAT and excise taxes contributed negatively, while the gross value added increased 2% yoy. There were more economic activit..
Flash comment: Latvia
May 28, 2020
Lavia: Labour market gets first coronavirus’ chills in Q1
Labour market weakened, unemployment rate up to 7.4% in Q1Wage growth moderated to 6.6% y/y in Q1, led by the private sectorWeaker developments expected in Q2Although the virus containment measures were in force for just a couple of weeks, labour m..
Flash comment: Estonia
May 27, 2020
Previously rapid wage growth stalls in Estonia this year
• Wage growth decelerated to 4.8%, over the year, in Q1. • Swedbank expects wages to grow by only 0.5% this year. Wage growth decelerated in the first quarter Gross wage growth decelerated to 4.8%, over the year, in the first quarter. The averag..
Flash comment: Estonia
May 15, 2020
The unemployment rate should peak this autumn
• Labour market figures were still strong before the crisis. • Data has deteriorated rapidly since March. Corona crisis did not affect Q1 data Q1 labour market survey was carried out between January and March, i.e. before the crisis hit. Therefo..
Flash comment: Latvia
May 12, 2020
Annual inflation 0%
Prices of goods fell by 0.8% Prices of services rose by 2.1% Fuel prices and prices of housing related services pulled inflation down. Fuel prices followed global oil prices and were down by 20%. Housing related services were cheaper due to previou..
Flash comment: Latvia
April 30, 2020
Latvia: the worst is yet to come
GDP in Q1 declined by 1.4% following an already unimpressive performance at the end of 2019. The drop versus the previous quarter was a substantial 2.9%.
Flash comment: Lithuania
April 30, 2020
Limited damage so far
Lithuanian GDP contracted -0.2 % in quarterly terms Overall, despite everything, economy expanded 2.6 % y/y Second quarter will bear the brunt of the damage The global pandemic has affected Lithuanian growth and derailed a trend of strong expans..
Macro Focus
April 29, 2020
Nordic Macro Monthly: Small economies get even smaller
Historical drops in GDP in the Nordics while unemployment surges Private consumption takes a deep hit due to containment measures Special theme: Temporary layoffs mitigate the effect on the labour markets
Flash comment: Latvia
April 8, 2020
Inflation 1.4% is twice less than a year before
Annual inflation 1.4% in March.Prices of services grew faster than prices of goods.Weaker price growth in March 2020 was a result of broad range of obstacles, e.g., falling price of Brent oil that resulted in lower price of fuel, reduced tariffs of..
Flash comment: Estonia
April 7, 2020
Weaker economic activity lowers inflation
• Annual inflation reached 0.9% in March in Estonia. • In 2020, we expect inflation to amount to 0.8%, or even 0.4%, if we include lower excise taxes proposed by the government. Compared to February, consumer prices declined by 0.7%. Annual inf..
Macro Focus
April 3, 2020
On the way out of the virus
Economic recovery can only really start once we get the virus under control. There is a wide range of different avenues being explored in an attempt to fight the pandemic – developing a vaccine, finding the drugs, devising new antigen and antibody ..
Macro Focus
March 24, 2020
Euro area short comment: Germany PMIs – down the Mariana trench
Services dive 18 points Manufacturing drops only 2.3 points The longer lockdowns in Europe continue the harder it will be to bounce back The PMI flash estimate followed yesterdays’ European consumer confidence and dived hard. PMI survey result..
Macro Focus
March 19, 2020
ECB launched massive 750 bn € crisis purchase program
This is a good start and will reduce sovereign spreads, but is still not enough • ECB more flexible with capital key • In 2020 purchases might exceed I trillion € ECB tonight launched a massive addition to its current QE purchases underlining th..
Baltic Housing Affordability Index
March 17, 2020
Housing remains and is likely to stay affordable
In the final quarter of 2019, all three Baltic capitals saw somewhat different trends. In Tallinn, housing affordability fell as the average price of apartments accelerated and net wage growth weakened due to the previous year’s tax reform. Housing..
Flash comment: Latvia
March 9, 2020
Annual inflation was 2.3%
Consumer price growth remained moderate in February. Annual inflation was 2.3%, while monthly inflation was 0.1%. Price changes were defined by global obstacles. In February, food prices experienced sharp increase and were driving annual inflation ..
Macro Focus
March 9, 2020
Too much money for too little demand in euro area?
The increased current account surplus and the widening gap between savings and investments have contributed to the fall in interest rates in the euro area.The government sector has had the largest impact on the increased gap, as the austerity polic..
Macro Focus
March 6, 2020
Corona hits the Nordics and Baltics
Read the full analysis/report here (pdf)Limited effects on growth and labour markets so far but with a continued and broadened spread of the virus the economic consequences will be large. GDP growth expected to be 0.4-0.8 percentage points lower in..
Flash comment: Estonia
March 3, 2020
Wage growth should ease in 2020
Wage growth remained relatively rapid and broad-based in the fourth quarter. Statistics Estonia’s wage data showed a slowdown in the annual growth rate of the full-time-equivalent average gross wage (+6.4%, over the year) in Q4 2019, mostly due to ..
Flash comment: Latvia
February 28, 2020
Annual GDP growth was 2.2% in 2019
Against the backdrop of softening global economy and high uncertainty, as well as sector specific factors, Latvian economic growth slowed considerably in 2019 – from 4.3% in 2018 to an estimated 2.2% last year. This was broadly in line with our for..
Flash comment: Estonia
February 28, 2020
Last year’s economic growth surprised on the upside
Last year's economic growth surprised on the upsideIn 2019, Estonian GDP growth was 4.3% y/y in real terms and 7.7% y/y in nominal terms. Although, the growth slowed from previous year, it was still strong and exceeded our expectations – our foreca..
Flash comment: Lithuania
February 26, 2020
Solid wage gains despite global weakness
Gross wages grew 8.8% last year Public sector wage growth was markedly stronger Women’s wages grow 1.5pp faster Lithuanian labour market seems unfazed by any global worries. Despite weak growth in EMU earnings growth in Lithuania maintained soli..
Macro Focus
February 21, 2020
Euro Area PMIs - Hopes for 1st quarter bounce clouded by virus
Both services and industry improve marginally in Euro areaGerman manufacturing improves sharply, but is still in contraction territory France activity improves as protests subside PMI flash estimate came out stronger than most expected given the g..
Flash comment: Estonia
February 16, 2020
Labour market set a new record in 2019
• Labour market indicators were very strong at the end of last year. • This year, we expect economic growth to slow and labour market to cool down a bit. Another employment record in the fourth quarter According to Statistics Estonia, in the fou..
Flash comment: Latvia
February 11, 2020
Annual headline inflation at 2.2% in the first month of 2020
In January, monthly headline inflation was 0.4%, and annual inflation rate was at 2.2%. Prices of goods grew by 2% on annual basis, and prices of services by 2.7%. The main drivers of annual inflation in January were transport, food, alcohol and to..
Flash comment: Lithuania
February 7, 2020
Labour market continued improving
Annual employment (15-64 years) grew by 0.6 ppUnemployment rate increased by 0.2 pp to 6.4%78.4% of people, aged 15-64, were economically active in Q4, 2019 Solid economic expansion in 2019 fuelled the demand for labour – annual employment grew by ..
Macro Focus
January 31, 2020
Disappointing Euro area data for the final quarter of the decade
Euro area quarterly growth has been disappointing at barely 0.1%. It confirmed our forecast that EA economy expanded 1.2% in 2019 – the slowest pace since 2013. The data for the last quarter was mixed overall. France and Italy surprised on the down..
Flash comment: Estonia
January 8, 2020
Inflation should remain moderate this year
Inflation was relatively weak at the end of last year, given the rapid growth in wages and other income. Inflation was moderate due to weak external price pressures and lower excise tax rates on alcohol. In December, inflation amounted to just 1.8%..
Flash comment: Lithuania
January 1, 2020
Ending the decade on high note
Lithuanian GDP expanded 3.9% in 2019 A very strong final quarter. Economy grew 1.3% in quarterly terms (season and calendar adjusted) This year and decade growth will be slower Defying all expectations Lithuanian growth accelerated to 3.9% up fo..
Macro Focus
December 16, 2019
Strong Lithuanian exports despite global weaknesses. What‘s the recipe?
Weak global trade and escalating trade tensions did not significantly affect Lithuanian exports, which grew by 7.3% during the first 10 months of 2019. Manufacturing, in general, and furniture, in particular, experiencing strong and consistent grow..
Estonian Economy
December 13, 2019
The Estonian Economy - The construction sector will not contribute to economic growth this year
The construction sector will not contribute to economic growth this yearAfter three consecutive years of strong contribution to economic growth, the construction sector is not supporting economic growth this year.Labour shortages in construction ha..
Macro Focus
December 11, 2019
UK election: Tory victory is likely but hung parliament could persist
Deal with Tory majority, referendum with Labour win, but hard to guess with Tory minorityOpinion polls suggest a Tory victory, but they should be taken with a grain of saltTactical votes - another complicating factor but probably few in number On ..
Baltic Housing Affordability Index
December 10, 2019
In the third quarter of 2019, the housing affordability index (HAI) increased in Vilnius, but decreased in Tallinn and Riga
In Tallinn, the HAI plunged by 5.7 points in the third quarter of 2019, compared with the third quarter of 2018, and ended at 148.5, as net wage growth was slightly slower than an increase in apartment prices and interest rates. In Riga, the HAI lo..
Flash comment: Latvia
December 9, 2019
In Latvia, annual inflation is the lowest since April 2018
In Latvia, annual inflation fell to 2.1% in November 2019, and was the lowest since April 2018. The average inflation this year (in 11 months) counted around 2.9%. In November, the growth of commodity prices continued to slow down (1.8%), whi..
Macro Focus
December 6, 2019
Water, water everywhere and not a drop to drink?
Since 2018 repo rates started hovering above the target band It indicates pressures building up in the money markets due to the lack of excess reserves Shortage is exacerbated around quarter and year-ends when a lot of funds are moved around
Flash comment: Latvia
November 29, 2019
Annual GDP growth was 2.9% in Q3 2019
The rather solid economic growth of 2.9% in Q3 2019 looks somewhat weaker when the data are corrected for the number of working days, resulting in a less optimistic 1.9% year-on-year figure. A key contributor, rather surprisingly, given the ..
Flash comment: Estonia
November 29, 2019
Robust economic expansion continued in the third quarter
Estonia’s GDP grew 4.1% y/y and 1.0% q/q (seasonally and calendar adjusted) in the third quarter this year. Non-adjusted annual growth was 4.2% in real terms and 7.3% in nominal terms. The growth was above our expectations. Economic growth is contr..
Flash comment: Lithuania
November 29, 2019
Still waiting for Godot i.e. Slowdown
Annual growth revised up to 3.7% Household consumption growth is slowing moderately Agriculture bounced back as expected and grew by 11% Both annual and quarterly growth was revised upwards by 0.1pp. Domestic demand remained robust, however hous..
Flash comment: Estonia
November 28, 2019
Rapid wage growth continued
Wage growth remained rapid and broad-based in the third quarter. The average full-time-equivalent gross wage amounted to EUR 1,397, up by 8.2%, over the year. Tax Authority’s gross median wage amounted to EUR 1,100, up by 10% in a year. Wage grow..
Flash comment: Lithuania
November 26, 2019
Wages unexpectedly accelerate again
Gross wage growth increased to 9.2% Public sector wages grew an impressive 12.2% Private sector annual wage growth recovered to 8% up form 6.3% in the second quarter Data for both economic growth and labour market have been more tepid than expec..
Flash comment: Estonia
November 15, 2019
Lower economic growth is expected to cool the labour market
New record According to Statistics Estonia, in the 3rd quarter, the unemployment rate decreased even further to a record-low 3.9%. The estimated number of the employed reached 677,000, the highest number since at least the re-independence (earlier..
Flash comment: Latvia
November 8, 2019
Annual inflation in October at 2.3%
In October, the annual rate of inflation softened comparing to higher rates in previous months. The annual inflation rate in October was 2.3%, with goods’ prices rising only by 1.9%, and services’ prices rising by 3%. Annual inflation was driven by..
Flash comment: Lithuania
November 8, 2019
Gloomy labour market data
Labour market data has disappointed in the 3rd quarter of 2019. While unemployed stayed flat compared to previous quarter, it was 0.5 percentage point (pp) higher than a year ago. Weakness is observed across most labour market indicators. Number of..
Flash comment: Latvia
October 31, 2019
GDP growth to continue gradually slowing
According to the flash estimate, the quarterly real GDP growth slowed to 0.7% (seasonally and calendar adjusted) in the third quarter, which is still quite a decent growth. The annual growth accelerated from 1.8% in the second quarter to 2.8% (not ..
Flash comment: Lithuania
October 30, 2019
Gradually pressing on the breaks
Lithuanian economy is holding up better than most expected given the bleak global outlook. While season and calendar adjusted quarterly growth was only 0.1%, annual growth inched down only slightly down to 3.6 % (unadjusted). Third quarter annual g..
Macro Focus
October 21, 2019
Will the Russian economy be able to find the gas pedal?
Russia’s GDP growth is expected to remain modest for an emerging market… but its macro-fiscal buffers are strong.The policy mix prioritises stability over growth The list of factors that inhibit Russia’s actual and potential GDP growth is long: low..
Flash comment: Latvia
October 8, 2019
Inflation has slowed down
In September, the annual rate of inflation slowed down to 2.6% that is the lowest value in 2019. The prices of goods’ were rising by 2.4% and contributed to annual inflation the most, but prices of services’ were rising by 3%. The main determinants..
Flash comment: Estonia
October 8, 2019
Inflation decelerated in September
• Inflation has remained relatively modest despite a rapid growth in wages. • Inflation is forecast at 2.4% this year and at 2.3% in 2020. Inflation slowed from 2.4% in August to 2.2% in September. Goods were 1.4% and services 3.5% more expensive..
Baltic Housing Affordability Index
September 17, 2019
In Q2 2019, the housing affordability index (HAI) increased in Vilnius, but decreased slightly in Tallinn and Riga
In Tallinn, the HAI decreased by 4.6 points to 151.5 in the second quarter of 2019, compared with the second quarter of 2018, as net wage growth was slower than an increase in apartment prices and interest rates.In Riga, the HAI decreased by 4.7 po..
Macro Focus
September 16, 2019
The curious case of household consumption in the Baltic countries
Lithuanians consume a lot more than Estonians and Latvians, despite higher wages in EstoniaDifferences in prices, remittances, saving rates, and, especially, unofficial income may explain this gap But material welfare may not be as good as it seem..
Flash comment: Latvia
September 9, 2019
Annual inflation in August reached 3.2%
In Latvia, annual inflation reached 3.2% in August 2019. It was above the average of 2018, but ranks only as third in 2019, after April and May highs. The prices of alcoholic beverages and tobacco were the fastest growing (5.6% higher than the last..
Macro Focus
September 9, 2019
Euro area: Quo Vadis R*?
Demographics and productivity are the main drivers of interest rates in the upcoming decades Without an increase in potential GDP growth, interest rates will remain low and will have many unwelcome side-effects It’s more difficult to stimulate t..
Estonian Economy
September 5, 2019
The Estonian Economy - Business sector digitalisation and automation: opportunities and challenges
Business sector digitalisation: opportunities and challengesEstonia has been in the forefront of e-Government solutions, but integration of innovative digital technologies in the business sector is still below the European Union average.Estonian ma..
Flash comment: Estonia
August 30, 2019
Flash comment: Estonia - August 30, 2019
Economic growth is still strong despite weakened foreign demandIn the second quarter of 2019, Estonian GDP growth slowed to 3.6% y/y in real terms and to 7.9% y/y in nominal terms. In the first half of this year, GDP growth was 4.2% in real terms. ..
Flash comment: Lithuania
August 30, 2019
Still strong growth, but looming risks ahead
Against most expectations, the Lithuanian economy bucked the trend in the first half of 2019 – GDP has increased by 4% (when season and calendar adjusted) and 4.1% (without the adjustments), compared to the same period a year ago. Meanwhile, in..
Flash comment: Estonia
August 29, 2019
Wage pressures expected to ease a bit next year
Wage growth is rapid and broad-based. The average gross wage amounted to EUR 1,419, up by 7.4%, over the year, in the second quarter. Wage growth was broad-based, in terms of sectors and levels. Tax Authority’s wage data show that the average gross..
Flash comment: Latvia
August 29, 2019
Wage growth keeps up in the Q2
Despite softening economic growth and the first signs of weakening in the labour market, wages are still increasing rapidly. The annual gross wage growth remained steady at 7.8% in the second quarter. Public sector wage growth has eased this year, ..
Flash comment: Latvia
August 15, 2019
Unemployment shrinks in Q2 despite softer economic growth
Despite slower economic growth, the unemployment rate fell to 6.4% in the second quarter. It was by 1.3 percentage points lower compared to the previous year. The number of unemployed declined by 18% largely driven by shrinking working age populati..
Flash comment: Estonia
August 15, 2019
Labour shortages could ease somewhat next year
No significant changes in Q2 data According to Statistics Estonia, labour market remained tight but did not improve further in the 2nd quarter. The number of the employed and the number of the unemployed stayed at last year’s level. Employment’s ..
Flash comment: Lithuania
August 9, 2019
Immigration boosts labour force
Unemployment has shrunk 0.4pp in the second quarter of 2019 but was 0.2pp higher than a year ago – the first annual increase in unemployment since 2010. However, the reasons for increase in unemployment is not a sign of distress or weakening in eco..
Flash comment: Latvia
August 8, 2019
Annual inflation in July at 2.9%
Annual inflation was 2.9% in July that is below its 7 months average in 2019. Inflation of both goods and services moderated to 2.9% and 2.8% respectively. Prices of services experienced the smallest annual increase in 2019. The main drivers of ann..
Flash comment: Lithuania
August 8, 2019
Average annual inflation remains steady at 2.4%
Due to the summer sales, monthly prices have decreased by 0.3% in July, whereas annual inflation remained steady for a sixth month in a row and stood at 2.4%. Prices of goods were 1.9% higher than a year ago, while prices of services grew by 4.5%. ..
Flash comment: Latvia
July 30, 2019
Annual GDP growth moderates to 2.1% in the second quarter
Economic growth continued into the second quarter, however, the annual growth rate slowed. According to the flash estimate, the quarterly GDP growth rebounded to 0.8% (seasonally and calendar adjusted), while the annual growth slowed to 2.1% (not a..
Flash comment: Lithuania
July 30, 2019
Strong and well-balanced economic growth continued in Q2
Lithuanian economy remained resilient to the global challenges and continued growing at an accelerated pace. GDP has increased by 4% (when season and calendar adjusted) and 4.1% (without the adjustments) in the second quarter of this year, compa..
Flash comment: Latvia
July 8, 2019
Annual inflation in June at 3%
In June, the annual rate of inflation continues to slow down comparing to higher rate in April, but still is at 3% level. The annual inflation rate in June was 3%, with goods’ prices rising by 3.1%, and services’ prices rising by 2.9%. The annual r..
Flash comment: Estonia
July 5, 2019
Inflation has decelerated this year
In June, inflation reached 2.4%, over the year. Goods were 1.8% and services 3.5% more expensive. Almost half of the increase in prices resulted from higher prices of food and housing. The prices of fresh vegetables have surged due to a drought las..
Baltic Housing Affordability Index
June 13, 2019
In Q1 2019, the housing affordability index (HAI) increased in Vilnius, stayed unchanged in Tallinn, but decreased in Riga
In Tallinn, the HAI stayed almost unchanged (-0.1 point) at 151.9 in the first quarter of 2019, compared with the first quarter of 2018, as net wage growth was slightly slower than an increase in apartment prices and interest rates.In Riga, the HAI..
Flash comment: Estonia
May 31, 2019
Strong beginning of 2019 exceeded expectations
Strong beginning of 2019 exceeded expectationsEconomic growth remained very strong at the beginning of 2019. In the first quarter of 2019, GDP growth in Estonia accelerated to 4.5% yoy in real terms and to 8.5% yoy in nominal terms. Strong first qu..
Flash comment: Lithuania
May 31, 2019
Robust economic growth did not lose pace in Q1
Even though Lithuania is an open economy, greatly dependent on imports and exports, country’s growth pace shows it is still reluctant to the global challenges, such as US-China trade war and German slowdown. GDP figures show that Lithuanian econ..
Flash comment: Estonia
May 29, 2019
Wage growth has not decelerated
In the first quarter of 2019, the average full-time gross wage amounted to EUR 1341, up by 8.0%, in a year. The average gross wage increased in almost all sectors. Wage growth was more rapid in construction, where volumes have grown markedly in rec..
Flash comment: Lithuania
May 28, 2019
Major gains in purchasing power due to tax reform
Wage dynamics of the last year continued in first quarter. Gross wage growth adjusted for tax reform eased by 0.3pp to 9.4%. In private sector wage growth cooled off by 1.1pp down to 7.4%. Meanwhile in public sector wage growth accelerated further ..
Macro Focus
May 21, 2019
India’s elections: more of the same will not turn India into a superpower
Prime Minister Modi’s ruling alliance is expected to win a thin majority India needs a bold economic reform agendaUntapped potential Indian PM Modi’s party is unlikely to repeat its success of the previous election of 2014, in which its coalition..
Flash comment: Estonia
May 16, 2019
The scarcity of labour keeps wage growth elevated
• The unemployment rate declined, and the employment rate slightly increased in the first quarter. • According to Swedbank’s forecast, labour market should remain tight this year, so wage pressures persist. Labour market remains tight Accordi
Flash comment: Lithuania
May 10, 2019
Employment growth exceeds expectations
Lithuanian labour market continued its strong run in the first quarter of 2019, solid economic expansion fueled demand for labour. Unemployment rate declined to 6.5%, 0.7pp lower than a year ago. Meanwhile annual employment growth was 2%, well abov..
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