In its report published on Wednesday, 8 September, the Organisation for Economic Cooperation and Development (OECD) predicted Latvia to experience the most rapid economic growth among Baltic States.
OECD predicts Latvia’s GDP may increase by 3.5% this year.
Next year Latvia’s economy is expected to grow by 1.6%.
The coordinated consumer price index in Latvia, according to OECD will increase by 13.3% this year and 8.6% next year. The unemployment level in Latvia, according to OECD, will increase to 7.2% this year and 7.4% next year.
OECD notes that Latvia’s export growth will slow down due to the consequences from the war in Ukraine, deficit of materials and weaker economic activity in Europe. However, strong demand for certain Latvian goods, including lumber and food products, will slow this drop. Inflation will remain high, reducing actual wages and residents’ private consumption.
Changes in foreign demand will contribute to a slight increase of unemployment.
For Lithuania OECD predicts the second fastest economic growth among Baltic States with a growth of 1.8% this year and 1.6% next year. This year consumer price rise in Lithuania is expected at 15.6%, whereas next year’s increase is expected as 7.9%. Unemployment in Lithuania, according to OECD estimates, will be 7.2% this year and 7.4% next year.
Read also: Inflation in Latvia reaches 16.9% in May
For Estonia OECD predicts GDP growth of 1.3% this year and 1.8% next year. Consumer price rise is estimated at 14.5% this year and 10.9% next year. The outlook mentions that unemployment in Estonia will be 7.1% this year and 8.3% next year.
OECD has downgraded this year’s global economic outlook to 3%, as opposed to 4.5% predicted in December 2021. The organisation noted in addition to the report that ‘the world will pay a high price for Russia’s invasion of Ukraine. The level of economic slowdown and inflation growth will depend on the war, but it is already clear the poorest countries will suffer the most.’
For Eurozone’s economy OECD predicts GDP growth of 2.6% for this year and 1.6% for 2023.
Germany’s economy is expected to grow 1.9% this year and 1.7% next year.
For the US OECD expects GDP growth of 2.5% for 2022 and 1.2% for 2023.