Baltic Tiger
.jpg){kind=link}
Baltic Tiger is a term used to refer to any of the three Baltic states of Estonia, Latvia, and Lithuania during their periods of economic boom, which started after the year 2000 and continued until 2006–2007. The term is modeled on Four Asian Tigers and Celtic Tiger, which were used to describe the economic boom periods in parts of East Asia and Ireland, respectively.
After 2000, the Baltic Tiger economies implemented important economic reforms and liberalisation, which, coupled with their fairly low-wage and skilled labour force, attracted large amounts of foreign investment and economic growth. Between 2000 and 2007, the Baltic Tiger states had the highest growth rates in Europe. In 2006, for example, Estonia grew by 11.2% in gross domestic product, while Latvia grew by 11.9% and Lithuania by 7.5%. All three countries by February 2006 saw their rates of unemployment falling below average EU values. Additionally, Estonia is among the ten most liberal economies in the world and in 2006 switched from being classified as an upper-middle income economy to a high-income economy by the World Bank. All three countries joined the European Union in May 2004. Estonia adopted the Euro in January 2011 whilst Latvia and Lithuania do not have a specified date, but are predicted to do the same in the following years.
The Baltic economies were predicted to continue growing at a high annual rate of 5–10% until at least 2010. In the 2000–2010 decade, gross domestic product was expected to rise dramatically, similar to what happened in Ireland during its 1990s economic boom. While their GDP per capita is currently at approximately 60–75% of the European Union average, they are expected to rapidly converge in income, even though EU average income is not expected to be reached in the near future. Even their present status at approximately 65% of the EU average is a remarkable improvement in such a short time, considering that in 1999, Latvia and Lithuania had a GDP per capita at only 25% of the EU average.
One negative characteristic of the Baltic states' economic growth has been a substantial growth in the current account deficit and external imbalances. This led some economists to correctly predict a risk for a 'hard landing' scenario and financial crises in Latvia and Estonia. On the other hand, they were very low government debt levels (7.1% of GDP in Estonia, 36.6% in Latvia),[1] the central banks in both countries have reserves approaching the M1 money supply,[2][3] and the biggest private banks are owned by solvent Scandinavian giants.
In 2008, the economic growth slowed down in all three Baltic states (due to global financial crisis), with Lithuania's real growth rate falling to 3.0%, Latvia's −4.6% and Estonia's −3.6%. As the global financial storm swept across Eastern and Central Europe, the Baltic states' economies have been especially hard hit: Estonia's GDP dropped by -16.2% year-on-year, Latvia’s by −19.6% and Lithuania’s by −16.8%.[4] By mid 2009, all three countries were experiencing one of the deepest recessions in the world.[5]
In 2010 economic situation stabilized and in 2011 the Baltic states were the fastest growing economies in the European Union again. Estonia had 7.6% growth in 2011, giving it the highest growth rate in the EU. The Lithuanian GDP grew by 5.9% and the Latvian GDP by 5.5%.[6]
Statistics
Annual GDP growth rate
| 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Estonia | 9.7% | 6.3% | 6.6% | 7.8% | 6.3% | 8.9% | 10.1% | 7.5% | −3.7% | −14.3% | 2.3% | 7.6% | 1.2% | 4.0% |
| Latvia | 6.1% | 7.3% | 7.2% | 7.6% | 8.9% | 10.1% | 11.2% | 9.6% | −3.3% | −17.7% | −0.3% | 5.5% | 2.1% | 4.0% |
| Lithuania | 12.3% | 6.7% | 6.8% | 10.3% | 7.4% | 7.8% | 7.8% | 9.8% | 2.9% | −14.8% | 1.4% | 5.9% | 2.3% | 3.8% |
| Data from Eurostat (2012 and 2013 data values are estimates) | ||||||||||||||
GDP per capita
In international dollars, at purchasing power parity (PPP). Numbers in brackets show the respective country's GDP per capita as a percentage of the eurozone average (also measured at PPP).
| 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Estonia | 9,909 (40.0%) |
10,935 (42.6%) |
12,044 (46.0%) |
13,284 (49.6%) |
14,882 (53.3%) |
16,618 (57.1%) |
18,819 (59.3%) |
20,584 (61.8%) |
20,259 (59.4%) |
18,386 (56.3%) |
18,266 (56.4%) |
18,790 |
19,811 |
| Latvia | 7,688 (31.1%) |
8,542 (33.3%) |
9,315 (35.6%) |
10,262 (38.3%) |
11,506 (41.2%) |
13,181 (45.3%) |
15,350 (48.3%) |
17,437 (52.4%) |
17,071 (50.1%) |
15,218 (46.6%) |
15,026 (46.4%) |
15,367 |
16,102 |
| Lithuania | 8,437 (34.1%) |
9,257 (36.1%) |
10,088 (38.5%) |
11,410 (42.6%) |
12,622 (45.2%) |
14,218 (48.8%) |
15,922 (50.1%) |
17,907 (53.8%) |
18,946 (55.6%) |
17,315 (53.0%) |
16,973 (52.4%) |
17,669 |
19,008 |
| Data from International Monetary Fund | |||||||||||||
See also
Economies of the Baltic Tigers:
Other 'Tigers'
References
- ^ "Public debt". World Factbook. Central Intelligence Agency. 2 April 2009. Retrieved 2009-04-09.
- ^ "Reserves of foreign exchange and gold". World Factbook. Central Intelligence Agency. 2 April 2009. Retrieved 2009-04-09.
- ^ "Stock of money". World Factbook. Central Intelligence Agency. 2 April 2009. Retrieved 2009-04-09.
- ^ http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a8U0aGhDyw68
- ^ http://www.thenation.com/doc/20091116/rizga
- ^ "GDP of Latvia increased by 5.5% in 2011". The Baltic Course. 2012-03-09. Retrieved 2012-03-24.