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Macro-Economic Aspects
of
BALTIC Sea Rim
Countries
Roshan Hemantha Alahendra
Jukka Vakio
Azeez 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
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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)
GDP growth (annual %)
GNI per capita, Atlas method (current US$)
13.11
9.8
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


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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 eastwest trade and energy transit routes. Forests
cover almost 40 percent of the country's territory.
Latvia
Population, 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)
GDP growth (annual %)
GNI per capita, Atlas method (current US$)
15.77
10.2
6760
Inflation, consumer prices (annual %)
6.8
Foreign direct investment, net inflows (% of GDP)
5.1
Unemployment, total (% of total labor force)
Time required to start a business (days)
Internet users (per 1,000 people)
10.6
18
350
Latvia
Lithuania
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
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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
Lithuania
Population, 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)
GDP growth (annual %)
25.50
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
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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
Poland
Population, total (millions)
38.2
Population growth (annual %)
0.0
Life expectancy at birth, female (years)
79.2
Life expectancy at birth, male (years)
Poverty headcount ratio at $2 a day (PPP)
(% of population)
GDP (current US$) (billions)
70.0
2.0
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
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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 currentaccount 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 $2 a day (PPP)
(% of population)
GDP (current US$) (billions)
GDP growth (annual %)
GNI per capita, Atlas method (current
US$)
13.5
763.72
6.4
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
120
in USD billions
100
80
2003
60
2004
2005
40
2006
20
2007
0
-20
Estonia
Latvia
Lithuania
Poland
Russia
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
Country
GDP per capita (PPP)
25000
In USD
20000
15000
10000
5000
0
Estonia
Latvia
Lithuania
Poland
Russia
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
Country
GDP current prises
1200
1000
800
USD billions 600
400
200
0
Estonia
Latvia
Lithuania
Poland
Russia
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
country
Inflation
300
250
200
Estonia
Latvia
index, 2000=100 150
Lithuania
Poland
Russia
100
50
0
2003
2004
2005
2006
2007
Economic climate of the Nordic
countries
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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
Unemployment rate
2005
8.90%
2006
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
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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
 Population growth rate
82,422,299
-0.02%
Sex ratio
M/F
 Life expectancy at birth
0.96 male

78,8 years
REAL GDP GROWTH
Real GDP growth
3,5
3,21
3
2,5
2
1,632
1,5
1,24
1
0,5
0,059
0
2000
-0,5
2001
2002
2003
-0,188
2004
GROSS DOSMESTIC PRODUCT
GDP per capita
29000
28500
28000
27500
27000
26500
26000
25500
25000
24500
24000
GDP per capita
2000
2001
2002
2003
2004
25576
26313
27132
27647
28605
FOREIGN TRADE
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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
1000
900
800
700
in USD bill.

600
500
400
300
200
100
0
Exports of goods
2000
2001
2002
2003
2004
550,213
571,967
615,646
748,531
911,763
GERMANY IMPORTS

Imports:$801billion
Imports of goods
800
700
600
500
400
300
200
100
0
Imports of goods
2000
2001
495,443
486,292
2002
2003
2004
490,087
601,76
718,153
in USD bil
GDP COMPOSITION

agriculture: 0.9%

industry: 29.6%

services: 69.5%
LABOUR FORCE
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
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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
Sources
www.statisk-bund.de
www.oecd.com
www.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.html
Economics seventh edition; (Begg, Fischer 2003)
http://www.indexmundi.com/norway/economy_overview.html
http://www.export.gov/comm_svc/press_room/marketofthemonth/nordic/nordic.html
International Monetary fund
World bank
Nordea Bank