Better and better, but still on thin ice
Growth is picking up after a terrible second quarter. But nothing is back to normal. Uncertainty will fade only after the threat from the pandemic is removed. Supportive fiscal and monetary policy is needed, but this comes with negative side-effects and should not be overstretched.
As we forecast in our May Swedbank Economic Outlook, the Baltic countries managed to suffer in the second quarter a milder contraction than the rest of the euro area, and they seem to be recovering fast. Given the somewhat smaller than expected drop in the second quarter and the very rapid recovery in household consumption, we have revised the GDP forecast upwards for all three Baltic countries, especially Lithuania, which has suffered only a very mild and short-lived recession.
For more information, contact:
Estonia: Tõnu Mertsina, Chief Economist Estonia, +3728887589
Latvia: Liva Zorgenfreija, Chief Economist Latvia, +37167445844
Lithuania: Nerijus Maciulis, Chief Economist Lithuania, +37052582237
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