OECD Predicts Economic Growth Only in Latvia Among Baltic States This Year

The Organization for Economic Co-operation and Development (OECD), in a report published on Wednesday, June 7, predicts that economic growth is expected this year only in Latvia among the Baltic States: the country’s gross domestic product (GDP) will grow by 1.1% this year, and 2.4% is expected next year rise.

In November, the OECD predicted that Latvia’s GDP would increase by 0.2% and 2.3% this year and next year, respectively. According to the OECD, the agreed consumer price index in Latvia will increase by 11.2% this year, and by 4.8% next year. On the other hand, according to OECD estimates, the unemployment rate in Latvia will be 6.6% both this year and next year.

The OECD states that the high inflation in Latvia will have a negative impact on consumer spending, while the growth rate of business investment will slow down, taking into account less favorable financial conditions and considerable uncertainty.

At the same time, the country’s exports will gradually increase due to the increase in external demand.

Inflation will also decrease significantly next year, but it will remain at a high level due to high producer prices.

The organization predicts that Lithuania’s GDP will remain unchanged this year, but will increase by 2.6% next year. This year, an increase in consumer prices in Lithuania is estimated at 13.1%, and next year a 5.7% increase is predicted. On the other hand, according to OECD estimates, unemployment in Lithuania will be 7.6% this year, but next year it will decrease to 7.1%.

For Estonia, the OECD predicts a 1.3% drop in GDP this year,

but next year the national economy expects 3.2% growth. The organization predicts consumer price increases this year and next year in Estonia in the amount of 9.2% and 3.4%, respectively. Forecasts say that the unemployment rate in Estonia will be 5.9% this year, but will decrease to 5.7% next year.

At the same time, the OECD increased the global economic growth forecast for this year to 2.7%, compared to the previously estimated increase of 2.6%. On the other hand, the organization has kept the global economic growth forecast at 2.9% for the next year. The organization says that the slowdown in energy price increases is helping to reduce inflation and reduce pressure on household budgets, as well as increasing consumer and business confidence. But at the same time

the impact of the increase in interest rates is felt more and more in the world, especially in the real estate and financial markets.

In the Eurozone economy as a whole, the OECD expects GDP to rise by 0.9% this year, and by 1.5% in 2024. In Germany, Europe’s largest economy, GDP will remain unchanged this year, but will grow by 1.3% next year, the organization predicts.

On the other hand, the OECD expects GDP growth of 1.6% and 1% in the USA this year and 1% in the next year, respectively, and in China – by 5.4% and 5.1%.

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