Baltic economies will start 2019 "in Goldilocks condition"

The economies of Latvia, Estonia and Lithuania will start 2019 "in a balanced state" according to the latest macro focus outlook from Swedbank, released December 19.

"Overall scores of the economy heat Index for the Baltics did not see significant change in the third quarter. All three economies are just below the long-term average of the index," Swedbank said.

"Latvia’s heat index saw the most action over the last quarter. Movements in unemployment, credit, inflation, and, particularly, the current account all signaled a rise in temperature in Latvia. However, the difference between wage and productivity growth has narrowed."

"It seems that the Baltics will greet the New Year in the “Goldilocks condition”. Temperatures are unlikely to rise significantly in 2019. The pressure that has built up in the labor market and high expectations could be released through spending and lead to larger trade deficit. But at the same time wage growth seems to have peaked, while global slowdown will keep expectations and prices at bay," the bank predicted.

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