Nordea expects Latvia to be fastest-growing Baltic economy in 2017

VILNIUS - Nordea, the biggest financial group in the Nordic and Baltic countries, forecasts that Lithuania's GDP growth will reach 3.8 percent this year, driven by rising exports and recovering investment, but will lag slightly behind that of Latvia.

In its latest Economic Outlook report released on Wednesday, the bank expects Latvia's economy to expand by 4 percent in this year and projects 3.3 percent growth for Estonia.

Nordea last March forecast 3 percent growth for both Lithuania and Latvia and 2.5 percent for Estonia in 2017.

In the latest report, the bank expects Latvia to remain the region's fastest-growing economy in 2018 with a projected 3.8 percent growth rate, compared with 3.5 percent for Lithuania and 2.9 percent for Estonia.

Lithuania is expected to post the highest GDP growth rate in the region in 2019, at 3 percent. Growth in both Latvia and Estonia is forecast to slow to 2.8 percent.

Average annual inflation in Lithuania is forecast to reach 3.8 percent this year before decelerating to 3.4 percent in 2018 and easing further to 2.5 percent in 2019.

Latvia is expected to record 3 percent inflation for 2017, 3.9 percent for 2018 and 2.8 percent for 2019. Estonia's inflation is projected at 3.3 percent, 2.5 percent and 2.4 percent, respectively.