Estonian industrial output falls too sharply...
TALLINN - Estonia’s industrial output as of the end of March sank 4.9 percent year-on-year and 5.3 percent compared with February, the statistics office announced on May 5. The decrease in manufacturing was mainly due to the decline in the production of food, wood and building materials. In the food industry alone, production decreased in all segments of the food industry except meat, the agency said. Analysts said that although industrial production was expected to decline in March, the decrease was sharper than anticipated. They said there were several reasons for the trend. “The cooling of the construction business affects the building materials industry. Production volumes in the tex...

  Experts: distrust hampers development...
RIGA - Popular distrust of state authorities is Latvia’s greatest problem and a factor hampering sustainable growth, foreign experts said at a recent conference. Helen Sutch, an expert in governance and public sector reform, said that since 1995 when she last visited Latvia the issue of public distrust still remained unsolved and there was a widespread belief that a person working in state administration definitely worked for his or her own benefit. Sutch said the existence of such opinions prevented Latvia from attaining its strategic development goals. Professor Bruno S. Frey, a leading welfare economist, pointed out the lack of confidence was one of Latvia’s main problems at the mome...

  Estonia cuts budget expenditures by over 3 percent...
Estonia’s government has slashed spending by 3 billion kroons (192 million euros), or 3.2 percent of projected expenditures, in an emergency measure to prevent revenue shortfalls from ballooning into a damaging deficit. The decision came as the outlook for the country’s economy continues to deteriorate and signs of a hard-landing appear inevitable. Meeting on April 24, the government also vowed to cut another 100 million kroons in order to balance the budget. Attempts to agree on those amendments failed last week, and a spokesman said ministers would convene on May 15 to finalize the cutbacks. The expenditure losses affect all ministries and government institutions, the government ...

  Nordea warns of Latvia’s vulnerabilities...
Nordea Bank has warned that negative global trends on the energy and commodity markets are likely to have a more far-reaching impact on Baltic consumers than originally thought. Roger Wessman, chief analyst with Nordea Markets, told journalists on April 24 the outlook for Latvia had become increasingly pessimistic in recent months and the slowdown of global markets would probably be stronger than previously believed. “Nobody doubts anymore that the U.S. is heading for a recession phase, with both the rise in unemployment and the decrease in consumption pointing to that. The eurozone is also continuing to feel the consequences of the subprime crunch, which is exacerbated by a substantial...

  Kirkilas: Lithuania’s economy is not in crisis...
VILNIUS - Prime Minister Gediminas Kirkilas has insisted that Lithuania is not experiencing an economic crisis, nor heading toward one, and that the problem was with opposition politicians who were suffering “a crisis in their heads.” “Our economy is currently growing at a rather rapid rate. We do not have final data for the first quarter yet, but we anticipate a similar growth rate to that we had last year,” Kirkilas told the Ziniu Radijas program on April 24.  “There will be no economic recession in Lithuania. Our industry and our businesses operate really efficiently. There are certain challenges, but I would not call that a crisis. The opposition always sees a crisis. Most prob...

  Deficits, demand dropping, depression...
RIGA – Estonia and Latvia are exhibiting the most pronounced economic slowdowns in the whole of Central and Eastern Europe, according to a new briefing from Capital Economics. An analysis of the region released on April 29 says that divergence in growth trends is becoming more marked, with countries running large current account deficits “beginning to feel the pinch from a deterioration in global financing conditions.” Notwithstanding the fact that Estonia’s current account deficit is actually among Europe’s smallest, the slowdown in the real economy has been most severe in Estonia and Latvia where domestic demand has slumped, Capital believes. “Elsewhere, countries with small...