Baltic countries
Members of the European Union (EU) since 2004, the Baltic countries have become, in a very short period of time, a formidable example of financial management and promotion of competitiveness and investment.
After a bold adjustment in 2009, which included very significant cuts in public spending and a contractive fiscal policy to contain the deficit, these three markets experimented the fastest recovery in the whole of the EU, returning to a growth of 6% in the last quarter of 2009, after having fallen over 15% during the first 9 months of the year. The construction sector, which sagged in 2009 and the retail one, which lost a third of its size in the same year, have ceased being a ballast for the rest of the economy and a boom in exports and in internal consumption have propelled the Baltics to the path of a sound and sustainable growth, based now in productivity and not anymore in bubbles. Their unemployment figures are already below 8% in the three countries, once they have already overcome the pandemic crisis of COVID-19. In fact, their economies are now 9% larger than before the pandemic (compared to the EU as a whole, which has barely managed to recover its previous level).
The European Commission forecasts sustained growth for 2022-2023: between 1% (Estonia) and 2.9% (Latvia), despite the crisis generated by the war in Ukraine, which began in February 2022. High inflation does not seem to have, for the moment, a significant influence on consumption, thanks to the parallel increase in the purchasing power of consumers. The dependency of the three countries on Russia is at an all-time low (2% goods, 10% services; vs. 73% EU).
In the period 2021-2027 they will receive a broad base of EU funds (LT: €2bn; LV: €1.1bn; EE: €900m), representing between 3 and 4% of their GDP. Currently the value of the external assets of the Baltic central banks is higher than any other registered in their history, consumers’ confidence grows, and public deficit is under control.
Several sectors of their economies, such as ICT, real estate (which has awakened with considerable force), machinery or equipment represent today big opportunities for foreign investors.
Because of their legal security, their business-friendly atmosphere, their privileged location and the competitiveness of their costs, the Baltics are also a very attractive logistic platform that can provide access to the big markets of their environment and to free economic zones with interesting tax advantages.