Macro-Economic Aspects of BALTIC Sea Rim Countries
Roshan Hemantha Alahendra Jukka VakioAzeez Oladapo Olokunola
The Baltic Rim economies continue to expand at an impressive pace. Economic progress coupled with large-scale migration in the wake of EU
entry of most countries has resulted in a sharp drop in un-employment there is even a risk that labour shortages could hamper growth notably in
the Baltic countries in the years ahead. This development seemed improbable just a few years ago. But much indicates that demand in these countries will also start to subside, reducing growth to more sustainable levels.
The anticipated global downturn in 2007 will put more pressure on exports, and the ECB’s rate hikes have an immediate effect on the Baltic countries. Al-though interest rates are still low, these trends should curb the buoyant credit growth and probably also temper the explosive surge in house prices in the Baltic region.
Estonia
Estonia is an upper middle-income country with a gross national income per capita of $9,100 in 2005
A small country of about 1.35 million people, Estonia has few natural resources and is heavily reliant on trade, with telecoms being one of its main exports.
Its GDP has grown at an average of 7.5 percent since 2001.
Estonia
Population, total (millions) 1.3
Population growth (annual %) -0.3
Life expectancy at birth, female (years) 77.2
Life expectancy at birth, male (years) 66.2
Poverty headcount ratio at $2 a day (PPP) (% of population)
6.7
GDP (current US$) (billions) 13.11
GDP growth (annual %) 9.8
GNI per capita, Atlas method (current US$) 9100
Inflation, consumer prices (annual %) 4.1
Foreign direct investment, net inflows (% of GDP) 9.3
Unemployment, total (% of total labor force) 10.0
Time required to start a business (days) 35
Estonia
Latvia Latvia is an upper middle-income country with a
Gross National Income per capita of $6,750 in 2005 (GNI, Atlas method).
More than one-third of a 2.3 million population is living in the capital city of Riga.
Latvia has few natural resources and imports all of its natural gas and oil, as well as part of its electricity. The country is situated on vital east-west trade and energy transit routes. Forests cover almost 40 percent of the country's territory.
LatviaPopulation, total (millions) 2.3
Population growth (annual %) -0.6
Life expectancy at birth, female (years) 77.7
Life expectancy at birth, male (years) 65.5
Poverty headcount ratio at $2 a day (PPP) (% of population)
4.4
GDP (current US$) (billions) 15.77
GDP growth (annual %) 10.2
GNI per capita, Atlas method (current US$) 6760
Inflation, consumer prices (annual %) 6.8
Foreign direct investment, net inflows (% of GDP) 5.1
Unemployment, total (% of total labor force) 10.6
Time required to start a business (days) 18
Internet users (per 1,000 people) 350
Latvia
Lithuania Lithuania is an upper middle-income country
with a gross national income per capita of $7,210 in 2005 (GNI, Atlas method).
Its population of 3.4 million enjoys high living standards and the health indicators of its citizens are significantly better than those of most other countries in the Europe and Central Asia Region.
Lithuania acceded to the European Union on May 1, 2004
LithuaniaPopulation, total (millions) 3.4
Population growth (annual %) -0.6
Life expectancy at birth, female (years) 77.8
Life expectancy at birth, male (years) 66.4
Poverty headcount ratio at $2 a day (PPP) (% of population)
7.4
GDP (current US$) (billions) 25.50
GDP growth (annual %) 7.3
GNI per capita, Atlas method (current US$)
7050
Inflation, consumer prices (annual %) 2.7
Foreign direct investment, net inflows (% of GDP)
3.4
Unemployment, total (% of total labor force)
12.4
Time required to start a business (days) 26
Internet users (per 1,000 people) 282
Lithuania
Poland
An upper middle-income country with a population of 38 million, Poland had a gross national income per capita of US$7,110 in 2005 (GNI, Atlas method).
Since 1989, the nation has undergone a remarkable political, social and economic transformation.
Achievements included uninterrupted economic growth averaging 5 percent per annum during the second half of the 1990s and accession to the European Union (EU) in May 2004
PolandPopulation, total (millions) 38.2
Population growth (annual %) 0.0
Life expectancy at birth, female (years) 79.2
Life expectancy at birth, male (years) 70.0
Poverty headcount ratio at $2 a day (PPP) (% of population)
2.0
GDP (current US$) (billions) 299.15
GDP growth (annual %) 3.2
GNI per capita, Atlas method (current US$)
7110
Inflation, consumer prices (annual %) 2.1
Foreign direct investment, net inflows (% of GDP)
5.0
Unemployment, total (% of total labor force)
19.0
Time required to start a business (days) 31
Internet users (per 1,000 people) 236
Poland
Russia
Russia is a middle income country with a population of approximately 143 million people and a gross national income per capita of $4460 in 2005 (GNI, Atlas method, WDI-2006).Russia is a collection of diverse territories at different stages of development.
Mainly because of high international oil prices, export revenue has soared since 2000. Import growth has picked up over the same period as a result of rising real incomes and real rouble appreciation.
The trade surplus climbed to US$118bn in 2005. The current-account surplus has been sizeable in recent years, exceeding US$84bn in 2005. The structure of exports is heavily dominated by fuels and raw materials.
Russia Population, total (millions) 143.2
Population growth (annual %) -0.5
Life expectancy at birth, female (years) 72.0
Life expectancy at birth, male (years) 58.8
Poverty headcount ratio at $2 a day (PPP) (% of population)
13.5
GDP (current US$) (billions) 763.72
GDP growth (annual %) 6.4
GNI per capita, Atlas method (current US$)
4460
Inflation, consumer prices (annual %) 12.7
Foreign direct investment, net inflows (% of GDP)
2.1
Unemployment, total (% of total labor force)
8.6
Time required to start a business (days) 33
Internet users (per 1,000 people) 111
Russia
Current Account Balance
-20
0
20
40
60
80
100
120
Country
in U
SD
bil
lio
ns 2003
2004
2005
2006
2007
2003 -1,111 -0,911 -1,289 -4,599 35,41
2004 -1,425 -1,77 -1,742 -10,357 58,563
2005 -1,374 -2,087 -1,929 -4,82 86,56
2006 -1,401 -2,493 -2,127 -7,944 105,993
2007 -1,475 -2,607 -2,268 -10,445 99,035
Estonia Latvia Lithuania Poland Russia
GDP per capita (PPP)
0
5000
10000
15000
20000
25000
Country
In U
SD
2003 13440,4 10177,38 11713,17 11358,98 9182,86
2004 14925,77 11396,11 12856,29 12292,92 10149,89
2005 16414,03 12621,59 14158,42 12994,2 11041,07
2006 17802,21 13784,29 15442,91 13797,2 11904,32
2007 19243,03 14933,48 16756,03 14609,21 12797,84
Estonia Latvia Lithuania Poland Russia
0
200
400
600
800
1000
1200
USD billions
country
GDP current prises
2003 9,185 11,186 18,687 216,539 431,429
2004 11,229 13,723 22,625 252,369 590,705
2005 13,108 16,648 25,726 300,533 766,18
2006 13,9 19,406 28,361 320,763 900,003
2007 15,4 21,803 31,074 340,698 1046,711
Estonia Latvia Lithuania Poland Russia
Inflation
0
50
100
150
200
250
300
2003 2004 2005 2006 2007
index, 2000=100
Estonia
Latvia
Lithuania
Poland
Russia
Economic climate of the Nordic countries
The Nordic countries (Finland, Sweden, Denmark, Norway) are considered to be among the world’s wealthiest countries.The region is sophisticated, competitive and dynamic. It has a stable economic and political climate.
There are a lot of similarities in selling factors in all of the Nordic countries. Finland and Sweden are members of the European union, Norway is not an EU-member, however it is linked to the EU through the EEA agreement.
FINLAND
Finland has a highly industrialized economy. Finland’s GDP per capita is roughly the UK’s, France’s, Germany’s, and Italy’s output.
Two fifts of Finland’s GDP is consists of Exports.
Probably the biggest problem in Finland’s economy is high unemployment rate.
FINLAND
Year 2005 2006
Unemployment rate 8.90% 7,2%
Inflation rate 0,7% 0,9%
GDP $151,200,000,000 $161,900,000,000
GDP per Capita $29,000 $31,000
Imports $45,170,000,000 $56,450,000,000
Exports $61,040,000,000 $67,880,000,000
FINLAND
DENMARK
The Danish people enjoy living standards topped by no other nation, because of high GDP per capita, welfare benefits and political stability.
Denmark has decided not to join 12 other EU members in the euro, However the Danish krone has managed to keep a stable position to the Euro.
DENMARK
Year 2005 2006
Unemployment rate 6.20% 5.70%
Inflation rate 1.40% 1.80%
GDP $174,400,000,000 $189,300,000,000
GDP per Capita $32,200 $34,800
Imports $63,450,000,000 $74,690,000,000
Exports $73,060,000,000 $84,950,000,000
Exchange rate; Danish Kroner/US Dollar
5.9969
SWEDEN
Sweden has reached a high standard of living, helped by peace and neutrality through out the whole century.
Swedish voters turned down EMU in September 2003.
SWEDEN
Year 2005 2006
Unemployment rate 5.60% 5.80%
Inflation rate 0.50% 0.70%
GDP $255,400,000,000 $268,300,000,000
GDP per Capita $28 400 $29,800
Imports $63,450,000,000 $74,690,000,000
Exports $73,060,000,000 $84,950,000,000
Exchange rate; sek/usd 7.4731
Exports and imports of goods and services Sweden
NORWAY
Norway is highly dependent on its oil production and international oil prices.Norway decided to stay out of the EU during a referendum in November 1994, however it contributes largely to the EU budget.
NORWAY
Year 2005 2006
Unemployment rate 4.30% 4.60%
Inflation rate 1,00% 1,60%
GDP $183,000,000,000 $196,400,000,000
GDP per Capita $40,000 $42,800
Imports $45,960,000,000 $58,120,000,000
Exports $76,640,000,000 $111,200,000,000
Exchange rate; Norwegian kroner / US dollar
6.4425 (2005)
GERMANY
DEMOGRAHPHICS
Population 82,422,299 Population growth rate -0.02% Sex ratio 0.96 male M/F Life expectancy at birth 78,8 years
REAL GDP GROWTH
Real GDP growth
3,21
1,24
0,059
-0,188
1,632
-0,5
0
0,5
1
1,5
2
2,5
3
3,5
2000 2001 2002 2003 2004
GDP per capita
24000
24500
25000
25500
26000
26500
27000
27500
28000
28500
29000
GDP per capita 25576 26313 27132 27647 28605
2000 2001 2002 2003 2004
GROSS DOSMESTIC PRODUCT
FOREIGN TRADE
Exports $1,016trillion Exports -
machinery ,vechicles,chemicals,metals,and manufacturers,foodstuffs,textiles
Imports $801 billion Imports -
machinery and vechicles,chemicals,foodstuffs,textiles,metals
Current account balance $115,5billion
GERMANY EXPORTS
Exports: $1,016trillion
Exports of goods
0
100
200
300
400
500
600
700
800
900
1000
in U
SD
bil
l.
Exports of goods 550,213 571,967 615,646 748,531 911,763
2000 2001 2002 2003 2004
GERMANY IMPORTS
Imports:$801billionImports of goods
0
100
200
300
400
500
600
700
800
in USD bil
Imports of goods 495,443 486,292 490,087 601,76 718,153
2000 2001 2002 2003 2004
GDP COMPOSITION
agriculture: 0.9%
industry: 29.6%
services: 69.5%
LABOUR FORCE
Labor force: 43.32 million Labor force - by occupation:
agriculture: 2.8% industry: 33.4% services: 63.8%
Unemployment rate: 11,7%
GERMANY
Budget: revenues: $1.249 trillion expenditures: $1.362 trillion
Public debt: 67.3% of GDP
Sourceswww.statisk-bund.de
www.oecd.comwww.cia.gov/cia/pubilcations/factbook
(http://www.bof.fi/bofin/gifs/bof_323_0i.gif)http://www.etla.fi/index.php?action=news&id=92
http://www.indexmundi.com/sweden/economy_overview.htmlEconomics seventh edition; (Begg, Fischer 2003)
http://www.indexmundi.com/norway/economy_overview.htmlhttp://www.export.gov/comm_svc/press_room/marketofthemonth/nordic/nordic.html
International Monetary fundWorld bank
Nordea Bank