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2023/06/07 / Erste Group Research
CEE | Baltics | Slow growth and lower inflation

Baltics | Slow growth and lower inflation

As a consequence of the fallout of the war in Ukraine, Baltic economies have witnessed a deceleration in growth, with Estonia even experiencing a period of recession. This year, the projected average expansion will be further curtailed due to a combination of high inflation, diminishing real wages, and stringent financing conditions.

Inflationary pressures within the region have surpassed those of all other EU nations, except Hungary, although it is currently displaying a sharp downward trajectory.

On the fiscal front, all Baltic countries find themselves in a favorable position, thanks to their prudent policies and the maintenance of low debt levels. The absorption of funds from the Recovery and Resilience Facility (RRF) has been relatively sluggish, particularly in Estonia, where only pre-financing has been received, with no subsequent payments. Nonetheless, both Estonia and Lithuania intend to seek additional loans through the REPowerEU program to augment their financial resources.

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General information

AuthorErste Group Research
Product typemonthly/ quarterly
Product nameCEE Country Macro Outlook
Topic in focusFX, Macro/ Fixed income
Market cap-
AvailabilityAll [1]


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