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Tuesday 24.10.2017 | Name days: Renāte, Modrīte, Mudrīte

Economic growth outlooks reduced for all three Baltic States

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In its latest outlook, Organisation for Economic Co-operation and Development reduced economic growth predictions for all three Baltic States.OECD mentioned that Latvia’s GDP will grow 1.1% this year, which is 0.8 percentage points lower when compared with the previous prediction in June.

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULatvia’s harmonized consumer price index, according to OECD, will decline 0.2% this year, 1.3% in 2017 and 1.9% in 2018.

OECD expects Latvia’s economic growth to pick up in speed in the next couple of years because of the recovery of EU funding and improved economic conditions in Russia, which will assist with export growth. At the same time, household consumption will remain strong, which will be increased by continued wage growth in spite of high unemployment levels.

Nevertheless, OECD warns that wage rise will be more rapid than productivity rise, which will likely slow down export contribution. In addition, OECD also recommends raising the quality of vocational education, which would help increase productivity and reduce the lack of skilled workers.

OECD’s latest predictions state that Latvia’s unemployment level will be 9.6% this year, 9.2% in 2017 and 8.8% in 2018.

For Estonia, OECD predicts economic growth of 1.1% this year, which is 0.7 percentage points less than a year before. Next year’s growth is estimated at 2.4%. Consumer prices will grow 0.8% in Estonia this year, 2.3% in 2017 and 2.6% in 2018. Unemployment in Estonia will likely reach 6.9% this year, 7.6% in 2017 and 8% in 2018.

For Lithuania, OECD predicts GDP growth of 2.1% this year, which is 0.7 percentage points less than a year ago. Next year, Lithuania’s GDP will likely grow 2.7%. GDP growth for 2018 is expected to reach 2.8%. Inflation index in Lithuania will likely be 0.6% (2.3% in 2017 and 2.8% in 2018). Unemployment level in Lithuania will drop from 8% this year to 7.5% in 2017 and 6.9% in 2018.

Russia’s GDP is expected to experience and 0.8% decline this year. However, it may grow by 0.8% next year and 1% in 2018.

OECD expects 6.7% GDP growth in China this year (6.4% in 2017 and 6.1% in 2018).

Germany, Europe’s largest economy, is expected to experience stable 1.7% growth over the next three years.

UK’s GDP will grow 2% this year (1.2% in 2017 and 1% in 2018).

Previously OECD reported global economy would grow more quickly than expected.

OECD has retained global GDP growth prediction at 2.9%. Nevertheless, the organization expects the world’s economy to grow 3.3% in 2017, not 3.2%, as was previously expected. For 2018, the organization expects economic growth of 3.6%.

Economic growth in OECD member states is estimated at 2% for 2017 and 2.3% for 2018.

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