10 March 2009

The tumultuous financial markets and rapidly fading global demand are dampening economic growth prospects across the UNECE region. According to the most recent figures, all of the advanced European economies are heading towards zero or negative GDP growth rates in the fourth quarter of 2008 (year-on-year), while Denmark and Italy crossed that line already in two out of three previous quarters. And most emerging European markets, including the Russian Federation, are in an obvious slowdown.

Hit hardest by now are the economies of two Baltic states - Estonia and Latvia - where output in construction and major market service activities shrank by nearly one tenth in the third quarter of 2008 (year-on-year) as domestic demand shrivelled. Lithuania’s GDP growth slowed down severely but remained positive thanks in part to some structural dissimilarity – the agriculture and energy sector play a more important role in Lithuania’s economy, and both recorded strong growth in the third quarter. The overall GDP growth in the third quarter of 2008 relied more strongly on agriculture, industry and construction as was also the case in the Czech Republic, Poland and Slovakia.

Source: UNECE Statistical database