The European Bank for Reconstruction and Development has revised its forecasts for the Baltic states downward. Although the region's economy will continue to grow, the pace of recovery will be slower than expected just a few months ago.
The European Bank for Reconstruction and Development (EBRD) has downgraded its economic growth forecasts for Latvia, Lithuania, and Estonia for both this year and next year.
According to updated estimates, Latvia's economy is expected to grow by 2% in 2026, down from a previous expectation of 2.2% growth.
The forecast for 2027 has also been lowered — from 2.5% to 2.3%.
Although the changes may seem minor, they indicate that international experts have become more cautious in assessing the prospects for the Latvian economy.
The EBRD highlights several risk factors for Latvia. Among them are the potential prolongation of the conflict in the Middle East, uncertainty surrounding the implementation of the Rail Baltica project, and the challenges faced by the airline airBaltic.
The downgrading of forecasts has also affected neighboring countries.
For Estonia, the bank now expects economic growth of 2.1% this year and 2.3% next year. Both figures are slightly below the forecasts made in February.
For Lithuania, the forecasts have been adjusted even more significantly. GDP growth is now expected to be 3% this year and 2.2% next year, down from previous predictions of 3.3% and 2.5%, respectively.
Despite the revisions, Lithuania remains the fastest-growing economy among the Baltic states.
What is important for residents? There is currently no talk of recession or economic decline. The EBRD still expects economic growth in all three countries, but this growth will be less dynamic than previously anticipated.
The revision of forecasts has affected not only the Baltics. For all countries in the region where the EBRD operates, the growth forecast for this year has also been lowered — from 3.6% to 3.1%.
At the same time, the bank has downgraded its forecast for Ukraine. According to the new estimate, its economy will grow by 2.2% this year and by 4% next year.
International financial organizations have increasingly warned in recent months about rising global uncertainty. Economic expectations continue to be influenced by geopolitical conflicts, the state of global trade, and investment activity.
For Latvia, this means that the economy will continue to grow, but the path to faster development remains dependent on both internal decisions and events outside the country.
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