Latest Data – December 2010.

The economic crisis in the Baltic states has begun to ease. “Growth prospects will depend on how well these countries can shift to a more export-oriented model,” Mark Allen, senior IMF resident representative for Central and Eastern Europe.

1. Estonia

 In 2009 GDP -13,9%. According to Statistics Estonia, by flash estimates, the gross domestic product (GDP) of Estonia increased by 4.7% in the 3rd quarter of 2010 compared to the same quarter of the previous year. Q3 2010: 4.7%; Q2 2010: 3.1%; Q1 2010: -2.0%. This change was influenced by the growth of value added in the manufacturing activity created owing to a vigorous growth of exports.

 The European Commission raised in its fresh autumn forecast Estonia’s economic growth forecast to 2.4% for the year 2010 and 4.4% for 2011. In 2012 the economy should grow 3.5%.

The Commission forecasts unemployment at 17.5% this year, 15.1% next year and 13.6% in 2012. Inflation should be 2.7% this year, 3.6% next year and 2.3% in 2012

  EURO – “We are at sea in a small boat tied to an ocean liner. In a storm or otherwise, we’d feel better being on board,” is how Estonian finance minister Jürgen Ligi describes his country’s determination to join the euro zone from January 1st, writes Bloomberg.

Estonia’s budget deficit may be about 1.3 percent of gross domestic product this year, Finance ministry said.

2. Latvia

 In 2009 the GDP shrank 18%, the worst fall in the European Union. A 7.5 billion euro bailout was led by the International Monetary Fund and the European Commission in 2008. Latvia expects a 0.4% fall in the economy in 2010. In 2011 the growth is expected to be around 3.3%. Government debt will peak at about 50.4 percent of GDP, according to the IMF.

 The targeted deficit cut was 280 million lats ($541 million) in the 2011 budget so the expected deficit reduction measures would be worth 2 percent of GDP. Latvia had already taken measures worth 1 billion lats in 2009 and 2010 to cap the deficit. Some of the austerity measures included public sector job losses and wage cuts by up to 50 percent as well as higher personal income tax rates and and a rise in value added tax. In 2011 the targeted budget deficit will be 6% of gross domestic product.

3. Lithuania

In 2009 Lithuania’s economy shrank 14,7%. In 2010 GDP Q3 2010: +0.6%, Q2 2010: +1.1%, Q1 2010: -2.0%. The government forecasts the economy will expand 1.6% in 2010. The 2011 budget was approved by the Lithuanian Parliament on December 9th. The targeted budget deficit will be 5.8% of GDP. Unemployment reached 17.8% in 2010.