Swedbank Raises Baltic GDP-Growth Forecasts on Private Spending

Swedbank AB (SWEDA), the Baltic region’s largest lender, raised its 2013 economic-growth forecasts for Estonia and Latvia, citing a better outlook for private spending and investment.

Estonia’s economy will probably expand 3.3 percent this year, compared with a January forecast of 3.1 percent, the Stockholm-based bank said today in an e-mailed report. Latvian gross domestic product may advance 4.3 percent, up from a previous 4.1 percent estimate. Swedbank left its Lithuanian growth projection unchanged at 4 percent.

The three Baltic economies grew at the fastest pace in the European Union last year as they recovered from the world’s worst recessions after Lehman Brothers Holdings Inc.’s 2008 collapse burst a property bubble and shut off credit flows. Latvia plans to become the euro area’s the 18th member next year to boost investment and trade after Estonia joined in 2011. Lithuania is aiming to adopt the currency in 2015.

Inflation may slow to an average 3.3 percent this year in Estonia, 1.1 percent in Latvia and 2.5 percent in Lithuania, Swedbank said. Estonia’s economic growth will accelerate to 4.2 percent next year, while Latvian GDP will increase 5 percent and Lithuania will expand 4 percent, it predicted.

To contact the reporter on this story: Ott Ummelas in Tallinn at oummelas@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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