Analytics, Economics, EU – Baltic States, Financial Services, GDP

Expansion is now slowing in Latvia and Lithuania, while Estonia's growth in 2013 will largely be unchanged compared to 2012, at 3.3%; next year, activity will increase by 3.7%, explains the bank.

In Latvia, SEB expects growth of 3.5% this year and 4.8% in 2014; the corresponding figures for Lithuania are 3.2% and 3.5%.

Growth in these three countries is mainly being driven by private consumption, although exports will also grow decently thanks to good competitiveness after earlier internal devaluations.

In Estonia, however, cost pressures have begun to emerge in the wake of high pay increases. SEB is sticking to its assessment that Latvia will get the green light to introduce the euro at the beginning of 2014.

There is a 50% chance that Lithuania will achieve its target of eurozone accession in 2015, since the country will find it difficult to bring inflation below the maximum qualifying level, adds the bank.