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Wednesday 18.07.2018 | Name days: Rozālija, Roze
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Economist: global economy recovering faster than forecast

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Baltic news, News from Latvia, BNN-NEWS.COM, BNN-NEWS.RU, Andris Strazds

Andris Strazds

The recovery of the global economy turned out to be faster than forecast in 2010. The pessimistic forecasts on US double dip did not come true, rapid growth was also ongoing in China and India, Brazil reported successful development as well, says Nordea banka senior economist Andris Strazds.

The economic recovery in Russia has taken place much slower than planned, however it is still a growth of 4%. Eurozone saw a moderate growth as well, however with deep differences among the member states, explains the economist.

Strazds stresses several export markets important for Latvia reported a more rapid growth than forecast, especially, Sweden and Germany. The Swedish economy grew more than 5% in 2010, thus recovering from the downfall in 2009. The German economy increased by 3.6% as well. Both of the states benefited from the international trade surge, in addition the construction sector revived in Sweden as well. Moreover, the well though over budget policy permitted Sweden to carry out economy boosting measures, at the same time concluding 2010 with a balanced budget.

He believes the moderate eurozone economic growth hides deep differences among the member states. Germany and Finland recovered fast, while Greece kept falling, but Spain and Ireland stagnating. These differences are to be evident also in 2011. The economic drop will be ongoing in Greece, while it is most likely to subside in Portugal, who despite the recent successful public bonds auction will have to ask for a bailout after presidential election on January 23. Weak growth expects Spain and Ireland as well. Estonia could be the leader in terms of economic growth with Germany and Holland following.

«Two-speed» eurozone will seriously intervene with the European Central Bank’s decisions regarding changes in the base interest rates, because the growing demand in the states reporting rapid recovery can boost price climb, while even a moderate interest rates growth will hinder the development of countries still struggling with the crisis. Most likely the European Central Bank will gradually start raising base interest rates in half a year already, at the same time keeping to carry out the current liquidity measures up to late 2011, thus the already historical time of low euro interest rates is approaching its end.


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  1. Ruth.lt says:

    So Estonia’s economy will emerge above other EU countries…

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