For this year, DNB forecasts Estonia 2.2%, Latvia 2.8% and Lithuania 2.6% economic growth. The average economic growth in the euro zone should be according to the bank's estimate 1.2%.
DNB predicts a faster, 4% growth for the Baltic countries by the year 2017, when Estonia should catch up with the rate of growth of neighbours.
"The Baltic countries' economic growth is still motored by domestic consumption since rising wages and falling interest rates have boosted consumer spending," said Meelis Paakspuu, DNB Bank's Chief Financial Officer. Household spending rose 4.6% last year in Estonia, especially in the second half of the year.
DNB predicts growth in average wages in all three countries by 4% this year and 5% next year. "Although stable wage growth will increase the confidence of households, it has negative consequences in terms of reduced competitiveness because wage increases have not been accompanied by an equivalent increase in productivity," said Paakspuu.
