NATO’s Achilles heel in the Russia-Ukraine war. Beware of Kaliningrad, Russia outside Russia, a crossing point between Europe and the three Baltic countries.
Last December the surplus on the CAB contracted to €66.5 million due to a significant widening of the foreign trade deficit.
GDP and consumption booms continue, but price-wage spiral too, as consequence of expansionary economic policy in recent years.
Riga is facing multiple challenges: energy prices, increasingly unemployed, a domestic market fall, global supply chain disruptions.
The example of Estonia suggests that the focus on an efficient allocation of resources works more effectively than a stimulus of demand.
Lithuanian export of goods rose more rapidly than imports. The largest share of FDI was attracted by companies in financial and insurance activities.
NBP action lags behind other CEE central banks, while authorities pretend the elevated CPI to be a result of external supply shocks.
The risk of wage-price spirals is increasing in front of labour shortages, commodity prices, and the tax changes introduced in the new “Polish Deal”.
Estonia showed one of the fastest recoveries from the crisis with an economic growth of 8%. However, a slow down is now expected.
GDP growth projections for 2021-22 have been revised downwards, hit by shortages of materials, equipment, labour and rising energy costs.