A Baltic Recovery?

Lithuania, the EU country which had the biggest drop in GDP in the year to the first quarter recoverered some of the loss in output in the third quarter as GDP rose 6% compared to the previous quarter, reducing the yearly decline from 19.5% to 14.3% The drop in the second quarter was also revised down from 20.2%.

Similarly, the second hardest hit country, Latvia has seen its industrial production rise in recent months.

The recovery in output combined with the current account surpluses that we have seen makes it increasingly unlikely that the baltic countries will feel the need to devalue.