Nordea Bank AB has predicted that Estonia, Latvia, and Lithuania will experience negative growth in 2010 as their economies fail to rebound as quickly as the rest of Europe.
In the company’s Baltic Rim Outlook yesterday, the region’s largest bank predicts Estonia’s GDP to fall by 0.5 percent, Latvia’s by 2.9 percent, and Lithuania’s output to shrink 2.4 percent before the countries return to positive growth in 2011.
Even then, the growth rates will not match those of a few years ago with expected growth rates of only 4 percent, 2.7 percent, and 3 percent in Estonia, Latvia, and Lithuania, respectively.
Within the European Union, the Baltic states have been hit the worst following the collapse of their real estate sector and languid growth in western Europe, where the three countries look to for more than 60 percent of their foreign sales.
“The hopes of recovery largely rely on the export sector, but so far demand from the main export partners is only growing cautiously,” Nordea Bank said in their report.