Direct Speech

International Internet Magazine. Baltic States news & analytics Wednesday, 12.12.2018, 01:38

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Negative trade balance has led to the largest quarterly current account deficit seen over the past years

Negative trade balance has led to the largest quarterly current account deficit seen over the past years


Following a build-up of the current account surplus driven by robust expansion of exports in the first half of the year, the trade balance shifted downside sharply in the third quarter. It was the deficit of the balance of trade in goods that was at fault. The above deficit grew rapidly and reached a high since the end of 2013. Overall, the current account deficit amounted to 444.4 million euro or 5.7% of gross domestic product (GDP) in the third quarter of 2018.

Keyword tags: Analytics, Banks, Direct Speech, Financial Services, Foreign trade , Latvia

Seizing the potential of climate solutions – and making the Baltics leaders in green economy

Seizing the potential of climate solutions – and making the Baltics leaders in green economy


As the most important UN climate conference COP24 since the historic Paris meeting is being held in Katowice, Poland, it is also time for the Baltics to think about delivering on the Paris Agreement’s promises. A recent study by SEI Tallinn and the Finnish innovation fund Sitra reveals that the Baltics have great potential in doing so. The key is scaling up Nordic solutions that have already proved their effectiveness.

Let’s Talk About Corruption

Let’s Talk About Corruption


Latvia and the United States have been close friends and partners for 100 years. We stood by the Latvian people throughout the darkest hours of the Soviet occupation. Today, we celebrate with you all you have accomplished. At your Centennial, you stand as a proud, strong, and valued partner in NATO, the EU, and the OECD. But friendship means more than recognizing what you have overcome. True friends challenge and push each other to become the best possible version of themselves.

The goods deficit widens as export growth slows

The goods deficit widens as export growth slows


Estonian exports of goods and services have grown more slowly in the first nine months of 2018 than in 2017, and imports have grown faster. Exports may have grown more slowly not only because growth in foreign demand has stalled, but also because price competitiveness and domestic economic activity have declined. The surplus on the current account in the first nine months of 2018 was 0.7% of GDP, which is notably less than the 2.8% recorded in the same months of 2017. The current account surplus has fallen because of the deepening trade deficit, which was 985.2 million euros in the first nine months of the year, or a third larger than it was a year earlier.

The element of surprise has vanished, but growth is still present

The element of surprise has vanished, but growth is still present


Emotions of surprise stirred by the release of the flash estimate of gross domestic product growth in the third quarter of 2018 have already subsided, but the detailed third quarter data published by the Central Statistical Bureau confirm that Latvia's economy has experienced rapid growth. At the same time, however, the question concerning the sustainability of the factors underpinning this growth remains relevant.


Workers coming from abroad help to ease labour shortages

Data from Statistics Estonia show that the average gross monthly wage was up 7.5% over the year in the third quarter of 2018. The rate of wage growth in recent quarters has been affected by the income tax reform. Labour shortages are being eased by workers hired from abroad, and this has reduced the upwards pressure on wages.


Ice between households and banks gradually melting

Monetary developments were primarily driven by business with households in October. Overall, household loans increased at a rate that had not been seen since May, whereas the monthly growth of the residential loan portfolio was the highest since 2008. At the same time, consumer credit also expanded. The growth rate of household deposits exceeded that of corporate deposits with banks.


Exports are fluctuating – what does the future hold?

Exports are still one of the main drivers of the country’s economy, however, current forecasts predict that in 2019 export growth will decelerate which, in turn, will drag on GDP growth. Following a slower start to the year, Lithuania’s exports have rebounded in the second half of 2018, closing in on the record levels of last year in August. Given such fluctuations, how will this see-saw year end and what awaits us next year?


Latvia’s energy sector: challenges and prospects

While possibly regarded as the back-bone of the existence of most economic activities, Latvia's energy sector is currently facing a number of challenges.


Different roads lead to employment

Photo by: Shutterstock In the third quarter, the number of employed persons in Latvia increased by 10.5 thousand quarter-on-quarter, while that of unemployed decreased by 6.6 thousand. Employment expanded not only on account of declining unemployment, but also as a result of the formerly inactive population entering the labour market.


Rising prices for services have started to push prices up strongly in Estonia

Consumer prices were 0.5% higher in October than in the previous month, and 4.4% higher than a year earlier. Accelerating inflation for services, which is related to rising wages, has started to push prices up strongly, and so inflation will average above 3% this year.


Latvia reports surprising economic growth

While the third quarter saw our trade partner growth rates declining, the flash estimate of Latvia's economic development suggests an even faster growth than before. The construction sector is a traditional contributor; however, its performance in the third quarter clearly does not explain growth of the gross domestic product (GDP): it means that positive surprises were observed in services sectors.


Vitas Vasiliauskas: Lithuania to stay one step ahead of the FinTech game

Participating in FinTech Inn, a high-level conference hosting more than 1,000 local and international stakeholders in the financial technology domain, Vitas Vasiliauskas, Chairman of the Board of the Bank of Lithuania, stressed the importance of both promoting innovation and maintaining high quality standards.


Bank of Estonia: Weaker relations between the Estonian financial sector and the Nordic countries brings new types of risks

The financial position of the Estonian banking sector is strong. The level of own funds of the banks is high, the quality of the loan portfolio of the banks is very good, and loan losses are small, informed Bank of Estonia.


Estonia's industrial growth slowing down – Luminor

The growth of the production of Estonia's industrial enterprises may be slowing down, but external demand remains sufficient to support industrial growth, Luminor chief economist Tonu Palm said, cities LETA/BNS.

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