The Organization for Economic Co-operation and Development (OECD) in the report published on Wednesday predicts the slowest recession in the Baltic countries for the Latvian economy this year.
The OECD predicts that Latvia’s gross domestic product (GDP) will decrease by 0.1% this year.
On the other hand, next year the Latvian economy is expected to grow by 1.9%, and in 2025 a 2.7% increase is predicted.
In June, the OECD predicted that Latvia’s GDP would increase by 1.1% and 2.4% this year and next year, respectively.
According to the OECD, the agreed consumer price index in Latvia will increase by 9.4% this year, by 3.1% next year, and by 3.3% in 2025. On the other hand, the unemployment rate in Latvia, according to OECD estimates, will be 6.4%, 6.5% and 6.4% this year and in the next two years, respectively.
The OECD indicates that the drop in inflation and the strong increase in wages will contribute to the increase in consumer spending. Limited financing conditions will have a negative impact on real estate and business investments, but state investments will increase thanks to the acquisition of European Union funds. However, at the same time, the lack of qualified employees and weak infrastructure planning capacity threaten the realization of investment plans.
For Lithuania, the OECD predicts the second fastest economic decline in the Baltic countries in the amount of 0.4% this year, while next year and 2025, respectively, an increase of 1.7% and 3.1% is expected. This year, an increase in consumer prices in Lithuania is estimated at 8.8%, next year an increase of 2% is predicted, and in 2025, an increase in consumer prices is estimated at 2.1%. On the other hand, according to OECD estimates, unemployment in Lithuania will be 6.8% this year, but next year and in 2025 it will be at the level of 5.9% and 4.6%, respectively.
For Estonia, the OECD predicts a 2.6% drop in GDP this year, next year the Estonian economy will grow by 0.6%, and in 2025 – by 2.5%. The organization predicts a rise in consumer prices in Estonia this year in the amount of 9.2%, and next year and in 2025 in the amount of 3.4% and 2.4%, respectively. The forecasts say that the unemployment rate in Estonia this year and the next two years will be 6.6%, 7.8% and 7.7% respectively.
The OECD predicts that global economic growth will slow to 2.9% this year and 2.7% next year, compared to 3.3% last year. However, in 2025, the world economy is expected to accelerate its growth to 3%, according to the OECD. The organization, however, points out that these forecasts are subject to the geopolitical tension caused by the conflict between Israel and Hamas.
In the Eurozone economy as a whole, the OECD expects GDP to rise by 0.6% this year, by 0.9% next year, and by 1.5% in 2025. Germany, Europe’s largest economy, is expected to contract by 0.1% this year, grow by 0.6% next year and rise by 1.2% two years from now.
On the other hand, in the USA, the OECD expects GDP growth of 2.4%, 1.5% and 1.7%, respectively.
2023-11-29 20:39:28
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