Baltic Economic Estimates Revised Downwards Again

The combined gross domestic product of the three former Soviet Baltic republics – Latvia, Lithuania, and Estonia – was again revised downwards. Estimates released by Swedish bank Skandinaviska Enskilda Banken AB (SEB) in its latest Nordic Outlook report show that the Baltic trio’s GDP will contract by 0.7% this year and return to growth, from +1.5% in 2024 to +2.9. % in 2025. Previous estimates made by SEB bank analysts last August pointed to an economic contraction in the three Baltic states of less than 0.4 percent.

“The lowest rung on the ladder” will be Estonia, whose GDP will contract by 2.5%, not 1.8% as predicted three months ago. The other two economies – Latvia and Lithuania – will be able to perform better, expecting to drop much less, by 0.2% each.

Finally, the inflation rate in 2023 in Latvia should not fall below 9.4%, while price growth in Lithuania will accelerate at the end of the year to 8.8%, and in Estonia inflation this year will be 9.5%.