Macro-Economic Aspects of BALTIC Sea Rim Countries Roshan Hemantha Alahendra Jukka Vakio Azeez Oladapo Olokunola

The Baltic Rim economies continue to expand at an impressive pace. Economic progress coupled with large-scale migration in the wake of EU entry of most countries has resulted in a sharp drop in un-employment there is even a risk that labour shortages could hamper growth notably in the Baltic countries in the years ahead. This development seemed improbable just a few years ago. But much indicates that demand in these countries will also start to subside, reducing growth to more sustainable levels. The anticipated global downturn in 2007 will put more pressure on exports, and the ECB’s rate hikes have an immediate effect on the Baltic countries. Al-though interest rates are still low, these trends should curb the buoyant credit growth and probably also temper the explosive surge in house prices in the Baltic region.

Estonia Estonia is an upper middle-income country with a gross national income per capita of $9,100 in 2005 A small country of about 1.35 million people, Estonia has few natural resources and is heavily reliant on trade, with telecoms being one of its main exports. Its GDP has grown at an average of 7.5 percent since 2001.

Estonia Population, total (millions) 1.3 Population growth (annual %) -0.3 Life expectancy at birth, female (years) 77.2 Life expectancy at birth, male (years) 66.2 Poverty headcount ratio at $2 a day (PPP) (% of population) 6.7 GDP (current US$) (billions) GDP growth (annual %) 9.8 GNI per capita, Atlas method (current US$) 9100 Inflation, consumer prices (annual %) 4.1 Foreign direct investment, net inflows (% of GDP) 9.3 Unemployment, total (% of total labor force) 10.0 Time required to start a business (days) 35

Estonia

Latvia Latvia is an upper middle-income country with a Gross National Income per capita of $6,750 in 2005 (GNI, Atlas method). More than one-third of a 2.3 million population is living in the capital city of Riga. Latvia has few natural resources and imports all of its natural gas and oil, as well as part of its electricity. The country is situated on vital east- west trade and energy transit routes. Forests cover almost 40 percent of the country's territory.

Latvia Population, total (millions) 2.3 Population growth (annual %) -0.6 Life expectancy at birth, female (years) 77.7 Life expectancy at birth, male (years) 65.5 Poverty headcount ratio at $2 a day (PPP) (% of population) 4.4 GDP (current US$) (billions) GDP growth (annual %) 10.2 GNI per capita, Atlas method (current US$) 6760 Inflation, consumer prices (annual %) 6.8 Foreign direct investment, net inflows (% of GDP) 5.1 Unemployment, total (% of total labor force) 10.6 Time required to start a business (days) 18 Internet users (per 1,000 people) 350

Latvia

Lithuania Lithuania is an upper middle-income country with a gross national income per capita of $7,210 in 2005 (GNI, Atlas method). Its population of 3.4 million enjoys high living standards and the health indicators of its citizens are significantly better than those of most other countries in the Europe and Central Asia Region. Lithuania acceded to the European Union on May 1, 2004

Lithuania Population, total (millions) 3.4 Population growth (annual %) -0.6 Life expectancy at birth, female (years) 77.8 Life expectancy at birth, male (years) 66.4 Poverty headcount ratio at $2 a day (PPP) (% of population) 7.4 GDP (current US$) (billions) GDP growth (annual %) 7.3 GNI per capita, Atlas method (current US$) 7050 Inflation, consumer prices (annual %) 2.7 Foreign direct investment, net inflows (% of GDP) 3.4 Unemployment, total (% of total labor force) 12.4 Time required to start a business (days) 26 Internet users (per 1,000 people) 282

Lithuania

Poland An upper middle-income country with a population of 38 million, Poland had a gross national income per capita of US$7,110 in 2005 (GNI, Atlas method). Since 1989, the nation has undergone a remarkable political, social and economic transformation. Achievements included uninterrupted economic growth averaging 5 percent per annum during the second half of the 1990s and accession to the European Union (EU) in May 2004

Poland Population, total (millions) 38.2 Population growth (annual %) 0.0 Life expectancy at birth, female (years) 79.2 Life expectancy at birth, male (years) 70.0 Poverty headcount ratio at $2 a day (PPP) (% of population) 2.0 GDP (current US$) (billions) GDP growth (annual %) 3.2 GNI per capita, Atlas method (current US$) 7110 Inflation, consumer prices (annual %) 2.1 Foreign direct investment, net inflows (% of GDP) 5.0 Unemployment, total (% of total labor force) 19.0 Time required to start a business (days) 31 Internet users (per 1,000 people) 236

Poland

Russia Russia is a middle income country with a population of approximately 143 million people and a gross national income per capita of $4460 in 2005 (GNI, Atlas method, WDI-2006).Russia is a collection of diverse territories at different stages of development. Mainly because of high international oil prices, export revenue has soared since Import growth has picked up over the same period as a result of rising real incomes and real rouble appreciation. The trade surplus climbed to US$118bn in The current- account surplus has been sizeable in recent years, exceeding US$84bn in The structure of exports is heavily dominated by fuels and raw materials.

Russia Population, total (millions) Population growth (annual %) -0.5 Life expectancy at birth, female (years) 72.0 Life expectancy at birth, male (years) 58.8 Poverty headcount ratio at $2 a day (PPP) (% of population) 13.5 GDP (current US$) (billions) GDP growth (annual %) 6.4 GNI per capita, Atlas method (current US$) 4460 Inflation, consumer prices (annual %) 12.7 Foreign direct investment, net inflows (% of GDP) 2.1 Unemployment, total (% of total labor force) 8.6 Time required to start a business (days) 33 Internet users (per 1,000 people) 111

Russia

Economic climate of the Nordic countries The Nordic countries (Finland, Sweden, Denmark, Norway) are considered to be among the world’s wealthiest countries.The region is sophisticated, competitive and dynamic. It has a stable economic and political climate. There are a lot of similarities in selling factors in all of the Nordic countries. Finland and Sweden are members of the European union, Norway is not an EU-member, however it is linked to the EU through the EEA agreement.

FINLAND Finland has a highly industrialized economy. Finland’s GDP per capita is roughly the UK’s, France’s, Germany’s, and Italy’s output. Two fifts of Finland’s GDP is consists of Exports. Probably the biggest problem in Finland’s economy is high unemployment rate.

FINLAND Year Unemployment rate 8.90%7,2% Inflation rate0,7%0,9% GDP$151,200,000,000$161,900,000,000 GDP per Capita$29,000$31,000 Imports$45,170,000,000$56,450,000,000 Exports$61,040,000,000$67,880,000,000

FINLAND

DENMARK The Danish people enjoy living standards topped by no other nation, because of high GDP per capita, welfare benefits and political stability. Denmark has decided not to join 12 other EU members in the euro, However the Danish krone has managed to keep a stable position to the Euro.

DENMARK Year Unemployment rate6.20%5.70% Inflation rate1.40%1.80% GDP$174,400,000,000$189,300,000,000 GDP per Capita$32,200$34,800 Imports$63,450,000,000$74,690,000,000 Exports$73,060,000,000$84,950,000,000 Exchange rate; Danish Kroner/US Dollar

SWEDEN Sweden has reached a high standard of living, helped by peace and neutrality through out the whole century. Swedish voters turned down EMU in September 2003.

SWEDEN Year Unemployment rate5.60%5.80% Inflation rate 0.50%0.70% GDP$255,400,000,000$268,300,000,000 GDP per Capita$28 400$29,800 Imports$63,450,000,000$74,690,000,000 Exports$73,060,000,000$84,950,000,000 Exchange rate; sek/usd7.4731

Exports and imports of goods and services Sweden

NORWAY Norway is highly dependent on its oil production and international oil prices. Norway decided to stay out of the EU during a referendum in November 1994, however it contributes largely to the EU budget.

NORWAY Year Unemployment rate4.30%4.60% Inflation rate1,00%1,60% GDP $183,000,000,000 $196,400,000,000 GDP per Capita$40,000$42,800 Imports$45,960,000,000$58,120,000,000 Exports$76,640,000,000$111,200,000,000 Exchange rate; Norwegian kroner / US dollar (2005)

GERMANY

DEMOGRAHPHICS Population 82,422,299 Population growth rate -0.02% Sex ratio 0.96 male M/F Life expectancy at birth 78,8 years

REAL GDP GROWTH

GROSS DOSMESTIC PRODUCT

FOREIGN TRADE Exports $1,016trillion Exports - machinery,vechicles,chemicals,metals,and manufacturers,foodstuffs,textiles Imports $801 billion Imports - machinery and vechicles,chemicals,foodstuffs,textiles,metals Current account balance $115,5billion

GERMANY EXPORTS Exports: $1,016trillion

GERMANY IMPORTS Imports:$801billion

GDP COMPOSITION agriculture: 0.9% industry: 29.6% services: 69.5%

LABOUR FORCE Labor force: million Labor force - by occupation: agriculture: 2.8% industry: 33.4% services: 63.8% Unemployment rate: 11,7%

GERMANY Budget: revenues: $1.249 trillion expenditures: $1.362 trillion Public debt: 67.3% of GDP

Sources ( Economics seventh edition; (Begg, Fischer 2003) International Monetary fund World bank Nordea Bank