The latest outlook of the Organisation for Economic Co-operation and Development (OECD), published on June 10, predicts an 8.1% GDP decline for Latvia.
At the same time, according to OECD’s latest estimates, next year Latvia’s economy will increase by 6.3%. In previous outlooks, published in November 2019, OECD estimated Latvia’s GDP might grow by 2.3% this year and by 2.5% next year.
The organization has created two development scenarios. One of them includes a second wave of coronavirus pandemic. If it does happen, Latvia’s GDP will drop by 10.2% this year, but will increase by only 2% next year.
In Latvia the coordinated consumer price index, according to OECD, will increase by 1% this year and by 1.3% next year. Unemployment level in Latvia will increase by 9.2% and by 9.3%, respectively.
OECD notes economic growth in Latvia has increased prior to the pandemic, whereas economic activity is set to recover gradually. Economic recovery benefits from domestic consumption. Exports will recover more slowly, which is largely because of the recession in Europe. Investments will reduce and will remain on a low level across 2021.
For Lithuania OECD predicts an identical economic decline, expecting GDP to drop by 8.1% this year, but grow by 6.4% next year. In the event of a repeated coronavirus pandemic, Lithuania’s economy will drop by 10.4% this year, but increase by 3.4% next year.
Consumer price increase for Lithuania is expected at 0.9% this year and 1.5% next year. The outlook mentions that Lithuania’s unemployment level may be 9.1% this year and 8.2% next year.
For Estonia OECD predicts the most rapid economic decline this year – 8.4%. Next year, however, Estonia is expected to experience an economic growth of 4.3%. In the worst-case scenario Estonia’s GDP will decline by 10% this year, but increase by 1.6% next year.
Consumer price increase in Estonia is estimated at 0.1% this year and 1.3% next year. Unemployment in Estonia, according to OECD estimates, will reach 9.2% this year and 8.1% next year. (BNN/Business World Magazine)
