Lithuania outperforms the Baltic region
Today, we would pay attention to the latest outlook summary on Baltic region (Baltics | Lithuania outperforms the region). Estonia is the only Baltic country with an economic contraction expected in 2024, with GDP not growing for the third year in a row. Latvia is also facing economic stagnation after positive growth revisions in 2023, while Lithuania is expected to grow by more than 2% in 2024. The economies are expected to return to growth in 2025, with Lithuania leading the way with an expected growth rate three times larger than its peers. Inflation remains stable in Lithuania and Latvia, while Estonia is projected to reach the target only in 2026. It is mostly due to the fact that Estonia has been experiencing higher inflation due to tax increases, whereas its peers have inflation pressures already under control. Budget deficits in the Baltic countries are expected to be around the Maastricht Criteria threshold, influenced by defense spending for the years to come.