Lithuania set to strengthen capital markets and attract more FDI
In March the deficit in the CAB was up by 2.6 times due to an increase in the foreign trade deficit. The annual inflation growth rate stands at 15.6%.
In March the deficit in the CAB was up by 2.6 times due to an increase in the foreign trade deficit. The annual inflation growth rate stands at 15.6%.
The Latvian economy already returned to its pre-pandemic level in 2021, only thanks to household consumption, wage growth and savings.
In Lithuania, the inflation rate reached around 11% in early 2022, and heating bills are expected to increase by 50% to 60%.
Last December the surplus on the CAB contracted to €66.5 million due to a significant widening of the foreign trade deficit.
Riga is facing multiple challenges: energy prices, increasingly unemployed, a domestic market fall, global supply chain disruptions.
Lithuanian export of goods rose more rapidly than imports. The largest share of FDI was attracted by companies in financial and insurance activities.
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.