In Latvia, the average remuneration has risen by 8.3% YoY, but this rate is insufficient to offset the price surge (+16.4%). Free-market allocation is much needed.
In Estonia, the consumer basket price was 24.8% higher YoY. Orders have declined, making harder to pass the higher costs to the final products. Competitiveness is at stake.
Latvia ranks 5th among EU members in VHCN. Last year important investment has been made in fibre optic communication innovation.
Even in uncertain times, Estonia’s FDI inflow as a percentage of the GDP is the 4th-largest in Europe, thanks to the business legislation and government’s efficiency.
The growth in the deficit was due to the payment of dividends, while the increase in the foreign trade deficit resulted from a decline in exports.
In May, inflation in Estonia touched 20% over the year, with higher energy costs being passed through to the prices of goods and services.
As the price of almost all goods and services continued to increase, the scenario in Latvia is worsened by the transport sector.
In Q1 employment in Estonia rose by 5.1% YoY, giving hope on the ability to absorb the shock of a fiscal and monetary tightening.
In Latvia, inflation projections for 2022 and 2023 have been revised upwards. The uptrend in prices is driven by several factors, mainly political.
As coal has the biggest potential to lower gas demand, Poland wants to use it to produce electricity after 2049 to bolster its energy security.