(photo: creative commons)
Lithuania is set to post the fastest economic growth in the Baltic states next year, a new report by the European Commission published Tuesday shows.
The European Commission projects that Lithuania's economy will grow by 2.7% this year, and by 3.1% next year.
Meanwhile, the EC predicts that Latvia's GDP will grow 2.6% this year, and 2.9% next year, while Estonia will see 1.9% growth this year and two% next year.
The European Commission also projects that Latvia's budget deficit this year will be 1.1% of GDP, it will be 1.2% of GDP in 2015, and will reduce to 0.9% of GDP in 2016
The European Commission's Directorate-General for Economic and Financial Affairs said in its autumn forecast that it expects a continued decline in unemployment and the decline in government debt below 10% of GDP in Estonia.
Estonia's economic growth this year has been boosted by domestic consumption, while export growth has slowed down. Consumption will continue strong growth next year, according to the forecast, supported by the growth in real income due to tax rate reductions and increases in family allowances.
The average salary is forecast to increase 5.2% this year, as well as in 2015. Our inflation is forecast this year to be 0.7%, next year 1.6%. This means that real increase of wages can be expected to continue.
Estonia's general government sector structural deficit is forecast by the European Commission to be 0.8% of GDP in 2014. The deficit shrinks to 0.7% in the next two years, if fiscal policies are not changed.