
Polish focus is on wages and demand, not production
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”.
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.
Last October the CAB surplus went up to €349.0 million. The primary income balance turned to surplus due to agricultural subsidies from the EU.
In Latvia, real GDP has decelerated, hit by production and supply disruptions. The growth of purchasing power is uneven and exceeded by wages.
In Estonia, inflation of 7% in October was caused by a sharp rise in energy prices and blockages in the supply chain. Demand is driving an economic growth.
Vilnius defended its right to expand cooperation with Taiwan, with huge potential for cooperation in semiconductors, lasers, and fintech.
Latvia’s GDP growth estimates for 2021 have been revised upwards to 5.3%, as well as inflation which is expected to reach 5% by the end of the year.
The current account surplus of €168.5 million replaced the deficit recorded in July. The CAB surplus is the result of a surplus in the balance of services.
ING estimates strong price pressure due to the continued rise in fuel, food and energy. In August, PPI accelerated to 9.5% YoY.
The Latvian central bank indicates an increase in GDP of 3.3% this year and 6.5% in 2022. Budget deficit and inflation forecasts are revised upwards.