here’s a breakdown of the provided text, focusing on the economic outlook for the Baltic states and global trends, as reported by Coface:
Baltic Economic Performance & outlook:
Lithuania:
Strongest in the Baltics: Demonstrating the most robust economic dynamics.
GDP Growth: 2.8% in 2024, 3.2% in Q1 of this year.Forecasts for 2025 and 2026 are 2.6% and 2.8% respectively.
Drivers of Growth: Increased household purchasing power, EU fund investments, and lower mortgage costs due to easing monetary policy.
Key Sectors Affected by German/French Demand Drop: Fisheries (-24%),drinks (-42%),and oil industry (-72%).
Estonia:
Returning to Growth: 1.2% GDP growth in Q1 of this year.
Forecasted Growth: 1.5% for the current year.
Limitations: Growth is constrained by tax increases and weak net exports.
Drivers of Growth: Public investment (especially Rail Baltica) and rising real wages. Challenges: Reduced competitiveness and dependence on demand from the US, Finland, and Germany.
Latvia:
Affected by German/French Demand Drop: Exporters felt a strong reduction in demand.
Most Severely Affected Sectors: Agriculture (-70%) and textile industry (-43%).
Key Recommendations for the Baltic Region:
Diversify Suppliers: Reduce reliance on specific markets.
Use Euro for Pricing: Stabilize transactions and reduce currency risk.
Invest in Energy Efficiency: Utilize Repowereu tools.
Strengthen regional Cooperation: Address trade stagnation with Poland since 2022.
Global Economic Trends & Risks (as of early 2025):
Global Growth Forecast: Onyl 2.2% for 2025, with potential for decline due to escalating geopolitical tensions.
Factors Affecting Global Growth: US protectionism, high tariffs, and uncertainty in China.
Impacted Industries Globally: Metalworking, automotive, and chemical industries.
Insolvency: 80% of developed countries are experiencing an increase in insolvencies.
International Business Habitat: Becoming increasingly complex, with Coface raising risk levels in 23 sectors and 4 countries worldwide.
Sectoral Risk analysis (Central & Eastern Europe and Western Europe):
Central & Eastern europe:
Low Risk: Pharmacy.
Low to Moderate Risk: Agriculture, food, and retail.
Increased risk: Automotive, chemistry, energy, information & IT, metalworking, and paper production.
High Risk: Construction, textile & clothing, transport, and woodworking.
Western Europe:
Medium Risk (Green): Energy, IT, and pharmaceutical sectors. High Risk: Agriculture, paper production, retail, transport, and woodworking.
Significantly Increased Risk: Automotive, construction, metalworking, textiles & clothing, and chemical industries.
Oil Prices:
Risks: Middle Eastern tensions, notably the potential blocking of the strait of Hormuz, could push prices above $100 per barrel.
Stabilizing Factors: Production outside OPEC+ and weaker demand are helping to stabilize the market.
Coface:
* Identified as one of the largest international credit risk insurers.
In essence, Coface paints a picture of a Baltic region with Lithuania leading in economic growth, supported by domestic factors and EU funds.However,all Baltic states are vulnerable to external demand shocks,particularly from major European economies like germany and France. Globally, the economic outlook is cautious, with rising risks across many sectors and countries, driven by geopolitical tensions and protectionist policies. Diversification and regional cooperation are highlighted as crucial strategies for the Baltic states to navigate these challenges.
