While EU members along the shores of the Mediterranean struggle with a seemingly endless slump, others who dip their toes in the Baltic are making a strong comeback. As the following chart shows, real GDP growth in the Baltic 3—Estonia, Latvia, and Lithuania—has recently run well above the euro area average. Meanwhile, the Med 4—Greece, Italy, Spain and Portugal—continue their downward trajectories. Official forecasts call for their economies to bottom out in 2014, but predictions have been wrong before.
readers might object that this chart is misleading, since, to
facilitate comparison, it shows output in all of the economies on a
scale with 2004 equal to 100. Isn’t it simply the case that the Baltic
countries are much poorer, and it is easier to grow from a low base?
Besides, what is there to brag about when real GDP in the Baltic 3
hasn’t even gotten back to its pre-crisis peak? >>>Read more