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12/5/07

FT.com / World - Baltic states- Estona, Latvia and Lithuania- see rapid growth - but economic fears persist

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Baltic states- Estona, Latvia and Lithuania- see rapid growth - - but economic fears persist

The former Soviet states of Latvia, Lithuania and Estonia are the EU's fastest growing economies, with growth rates in 2006 of 11.9 per cent in Latvia and 10.4 per cent in both Estonia and Lithuania. This has been accompanied by economic imbalances such as rapid credit growth, a frothy housing market, extremely high current account deficits, and high inflation. These imbalances have prompted fears that all three economies could experience a hard landing and that this could contaminate other countries in eastern Europe such as Bulgaria and Romania.

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