
Even the brightest hope cannot deny a harsh truth
Despite the optimistic forecast, inflation in Latvia remains among the highest in the euro area. Investment growth prospects have not improved.
Despite the optimistic forecast, inflation in Latvia remains among the highest in the euro area. Investment growth prospects have not improved.
A GDP contraction of –0.3% is predicted for this year in Lithuania, with +2.7% growth in 2024. Inflation to decrease more slowly than expected.
Poland will temporarily stop all imports of grain from Ukraine. How additional restrictions to free markets would now improve the outlook?
The Polish industrial production fell 1.2% YoY, with GDP growth down to 1% in Q1. Wages continue to feed inflation, putting pressure on real disposable incomes.
The rapid growth in wages drives domestic inflation. While higher energy prices, reduced access to raw materials, and weaker demand hamper exports.
Central banks are normally cited as the entities who fix the economy by disinflation, not those who broke the market by causing inflation.
While the global economic situation is deteriorating, the focus should be reversed on GDP growth and net exports, targeting core inflation.
In Latvia, inflation increased by 20.8% YoY, with the annual rate at 17.3%. Disinflation likelihood is less than in the US, given the ECB delay in raising rates.
While analysts predict disinflation, Poland faces increasing energy prices for households linked to higher indirect tax rates. And food prices continue to rise.
In Estonia, consumers have not been able to keep pace with inflation in recent months, and retail sales volumes have started to fall.