VILNIUS - The Baltic countries are now much more resilient to economic shocks than they were a decade ago, the Swedbank chief economist in Latvia said on Monday.
"There is much less credit expansion in the Baltic countries today, which means there are no bubbles there, compared to the economic crisis 10 years ago," Martins Kazaks said at a Swedbank economic forum in Vilnius.
"When the next crisis comes, the bubbles will be much smaller, imbalances will be much smaller and recession will be much smaller than we saw. Households take on fewer loans; debt levels are lower. The next crisis will not be that painful," he said.
Despite a slowdown in economic growth, the Baltic countries maintain a high level of optimism, the economist noted.
"It (optimism) is very strong in the service sector. Industry and households are optimistic, they invest and spend more," he said.
"All major segments are rebounding. We see strong export growth, especially in Lithuania. The global economy helps you do that. The labor market starts to feel pleasant temperatures. Businesses grow their volumes, increase profits and start to hire".
Swedbank in late March lowered its 2018 economic growth forecast for Latvia from 4.2 percent to 3 percent, but left its projections for Lithuania and Estonia unchanged, at 3.2 percent and 3.9 percent, respectively.
The 2019 growth forecasts are at 2.5 percent for Lithuania, 3.2 percent for Latvia and 3.0 percent for Estonia.