The Foresight Centre of the Riigikogu, LV PEAK of the University of Latvia and the Government Strategic Analysis Centre (STRATA) of Lithuania carried out a joint study “A comparative review of socio-economic implications of the coronavirus pandemic (COVID-19) in the Baltic States”.
Three states entered the crisis in slightly different positions. The economic momentum was slowing down in Estonia and Latvia already in the second half of 2019 whereas Lithuania was still showing a steady growth. The growth in Latvia and Estonia was replaced by a decline in the first quarter of 2020 due to COVID-19 induced economic crisis and the lockdown measures implemented in March. The GDP decreased by a -1% in Latvia and -0.7% in Estonia1 . Remarkably, the GDP in Lithuania was still growing in the first quarter of 2020 that can be associated with the stable government expenditures and lower decline in exports only 0.2% decline y-o-y, while export decline in Estonia and Latvia was respectively 2.4% and 2.6%.
The second quarter 2020 has been the most difficult for all of the Baltic States as the economies had to act under the lockdown measures around half of this three-month period. The GDP decline reached to -8.9% in Latvia, -6.9% in Estonia and -4.6% in Lithuania. However, these are still remarkably good figures compared to the other EU states (EU27 -14%) and only Finland, Sweden and Norway have shown comparable numbers3 . Hence, the relatively limited shrinkage of Baltic economies can be associated, among other things, with close trade relations among the resilient BalticNordic economies. This has been especially important for Estonia and Latvia where the Nordic countries are the most important export markets.
Please read more about socilio-economic implications of the pandemic in the Baltic States by clicking this link.