SEB lowers its Baltic growth forecast from 3.7% to 2.5%

23.11.2011, 11:07

Second largest bank in Estonia, SEB, said yesterday that it has lowered annual economic growth forecast of Baltic economies for 2012 from 3.7% to 2.5%.

However, the bank said that it expects all three countries to avoid a decline in economic growth.

According to SEB, export boom is reaching its end and sectors sensitive to economic cycles have not yet restored from the previous contraction.

Hardo Pajula, chief analyst of SEB in Estonia, said that the second wave of crisis that is taking shape is going to be different and less severe for Estonia, Latvia and Lithuania.

“While in the first wave, problems moved from outer areas towards the centre, the second wage will move in the opposite direction as stricter capital requirements imposed on centrally located banks will be restricting the financing capacity in outer areas,” said Pajula.

He added that Snoras bank is a textbook example that things have become more difficult also in the Baltic countries.

in comment that tighter integration of Baltic states into Scandinavia is helping them to survived the new wave of crisis.

“This is clearly a place where geography is becoming a security issue and since the Nordic countries and Baltic countries are closer than ever, we are in a better position than any other region in Central or Eastern Europe,” said Pajula.

“Generally speaking, if there is going to be a major bad news, it may well be from Sweden, partly because things today are still so good,” he concluded.