1 / 34

Global Economic Environment: Prospects for the Baltics

Global Economic Environment: Prospects for the Baltics. Jekaterina Rojaka DnB NORD Chief Economist October 14 th , 201 1 Riga, Latvia. Rise in global exports proved to be short-lived. Source: WTO. The global recession is back?.

duncan
Download Presentation

Global Economic Environment: Prospects for the Baltics

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Global Economic Environment: Prospects for the Baltics Jekaterina Rojaka DnB NORD Chief Economist October 14th, 2011 Riga, Latvia

  2. Rise in global exports proved to be short-lived Source:WTO

  3. The global recession is back? • In Sept., sentiments dropped in most of regions, especially in Europe • Number of new manufacturing orders stagnate Source: Capital Economics

  4. IH 2011: Monetary policy restrictions FORECAST Source: Reuters Ecowin, DnB NOR

  5. 2011 IIH: Turnaround in monetary policy Forecast 2011 Sept. Source: Reuters Ecowin, DnB NOR

  6. 2011 2nd half: growth slows down in EU Source: Eurostat

  7. Euro zone industy is out of steam Source: Eurostat. Capital economics

  8. Most EU countries fail to balance foreign trade Source: Eurostat

  9. In recent year most EU countries went deep in debt Source: Eurostat

  10. In the Baltics fiscal deficit was moderate, compared to the EU Source: Eurostat, European Commission

  11. Investors’ concern over Portugal and Greece is soaring Sovereign debt servicing costs, 2011 Rise of debt servicing costs in 2011, p.p. of GDP Sovereign debt, % of GDP, 2011 Source: Reuters Ecowin, European commission

  12. Decisions within eurozone stem fromits structure Source: Eurostat

  13. Solutionsof euro crisis to influence Baltics’ economic development

  14. Capital outflow from Russia during the first nine months of 2011 was larger than one during entire 2010 • Despite solid economic growth, stimulated by budget funds, domestic and foreign investors lack faith in countries future. • One time political events (election, reforms, interest rates’ changes) • Investment environment • Asymmetric migration • Russia’s direct investment to foreign countries • What happens if oil price falls below $60 / barrel? Source:Central Bank of Russia

  15. Ruble depends on oil price and political stability • If the euro-zone debt crisis takes a turns into a banking crisis, it may wellbecome problematic for Emerging European economies to roll over their maturing external debt. • SEE risks are rising - be careful Source: Capital economics, IMF

  16. Emerging Europe is vulnerable • If the euro-zone debt crisis turns into a banking crisis, Emerging European economies will face difficulities to roll over their maturing external debt. • SEE risks are rising … Source: Capital economics, IMF

  17. Focus on the Baltics

  18. The Baltics grew at fast pace over last decade Source: Eurostat

  19. Baltic countries are among the EU leaders according to GDP growth rates this year Source: Eurostat, national statistics offices

  20. Situation in labour markets is improving *Youth unemployment rate – in the age group ≤ 24 years; Source: Eurostat

  21. Labour costs start rising, the Baltics yet sustained their competitiveness Source:Eurostat, *DnB NORD Research calculations 21|

  22. The Baltics are leading EU in terms of manufacturing growth

  23. Exports – the main source of a rapid recovery Source: Eurostat 23|

  24. Productive investments, after being put on halt, start rising * 2010 structure Source:Eurostat 24|

  25. Foreign investment flows grew to almost pre-crisis level 25| Source: national central banks, Eurostat, national statistics offices

  26. Competitive position in the Baltics improved 47th +3 70th +6 33rd = 83rd -7 Source:WEF

  27. Business and consumers’ sentiments improve, although at a slower pace Source: European Commission

  28. The Baltics undergo deleveraging process Source:national central banks

  29. RE market activity has already recorded the lows and starts moving slowly up Source: Centre of Registers, Statistics Estonia, Zemesgrāmata, national statistics offices

  30. Global economic outlook: uncertain future • EU problems are growing, decisions are being postponed, patience of financial markets participants may soon evaporate. • US will have to face tough reforms, that may drastically reduce rate of its economic growth. • Russia’s main problem – lack of efficiency. If commodities’ prices fall, country will have to deal with tremendous challenges. • Global economy may still surprise in an unpleasant way – the Baltics should get ready in advance. Inkcinct

  31. Thank you for your attention! DnB NORD analytical publications are available at: www.dnbnord.lt/publications 31|

  32. Foreign investment flows grew to almost pre-crisis level 32| Source: national central banks, Eurostat, national statistics offices

  33. Pernai emigracijos statistiką kilstelėjo privalomos įmokos į PSDF, bet ir 2011 m. rodiklis bus įspūdingas 33| Šaltinis: Statistikos departamentas

  34. Lietuva: verslo įmonių atsigavimas akivaizdus Šaltinis: Statistikos departamentas

More Related