Analytics, Economics, Estonia, Financial Services, GDP, Loan

Latvia's economy is to grow 2.5% and Lithuania's economy 3% this year. Growth is to mainly be a result of exports recovering and consumption increasing. In addition, loan volumes in the Baltic countries are again showing signs of growth, DNB said.

Estonia's economy is to grow 2% this year and 2.7% next year. "One of the main factors behind economic growth is the recovery of investments. The start of the new funding period of the European Union somewhat postponed private sector investments and as a result the new growth should be felt in 2017," senior analyst at DNB Priit Roosimagi said.

In the past few years, loan activities have become more active and according to the fresh economic forecast are growing in the direction of both households and businesses. At the same time the level of private sector's deposits has increased faster than loans which provides an important buffer in case uncertainty should grow. "In the near future positive trends are still prevailing and domestic demand is to remain an important contributor to economic growth also in the future," Roosimagi said.

According to Roosimagi, declining energy prices reduced the costs of producers and consumers in the Baltic countries in 2015. At the same time the low price of oil had a negative impact on the neighboring countries' economies and weakened export developments. "Now the processes are moving in the opposite direction – one can be optimistic about the recovery of the oil price," he said, adding that the market should find a new balance this year or by next year the latest.