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.
Some
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?
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