The biggest lender in the Baltic States – Swedbank – announced on Thursday that there is fear of a new recession in the western countries, spreading to emerging markets and thus creating a new global economic crisis, the banking group said in a statement.
However, the greatest jeopardy to western societies is possible economic stagnation.
With no or low growth for many years to come, negative effects on welfare systems is expected, Swedbank said in a statement.
The Estonian gross domestic product increased by 8.4% in the second quarter of 2011, in comparison to the same quarter of last year. As the largest lender in the Baltic States – Swedbank – writes, despite solid results in the first half of the year, worsening external developments and falling confidence are suggesting the H2 outcome will be less vigorous, writes LETA.
As reported, manufacturing industry accounted for nearly two thirds of the increase in added value while the shares of industry as well as of the exports sector have fallen in comparison to earlier quarters – which means that other sectors are becoming increasingly important in economic growth.
The Estonian Ministry of Finance expects that the economic developments in the second half of the year are more modest and it is expected that the entire year's growth could be seven%. Increased lack of stability in a global perspective and cooling of the global economy will not make it possible to increase exporting enterprises’ production volumes in the current pace and will also affect households’ consumer confidence. Therefore the economic growth will slow down to 3% in 2012.
Nina Kolyako
If economic stagnation in western countries, then quite easy to imagine economic and business situation in Baltic states (especially Latvia)
Posted by: Company Formation | September 14, 2011 at 19:44