Best regards,
Mindaugas Jurgelis
Analyst

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With one of the highest weights of food and beverages in total price index, inflation rate in Estonia sensitively reacts on any changes in food prices (see charts below). In recent months, about a half of overall increase in the annual CPI rate was triggered by elevated level of food prices, the other important causes of stubbornly high prices were rising administrative costs of housing and energy.

Assessment: We expect consumer prices to drop back in autumn and inflation to slow down to 4.5% by the end of 2011. That assumes, for sure, that there is no further spike in global food prices. The upward strong growth and recovering domestic demand may prevent consumer inflation to drop sharply, though.

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Latvia’s average monthly gross wages grew by 5.5% yoy in the Q2. The quarterly change in gross wages stood at 3.9%. In June real wages picked up by 2.4% thus adding stimulus to consumption.

In the public sector earnings increased by 7% yoy to EUR 715, while in private sector wages were up 5% to EUR 627. The fastest earnings growth was recorded in professional services, apparently driven by rapid recovery and flexible remuneration structures. However the major sectors (e.g. manufacturing, transport and storage) demonstrated lower than average results.

Despite having the highest unemployment rate among the three Baltic countries, Latvia stood out with the highest annual growth rate of gross wages in Q2. Latvia’s wages in nominal terms (EUR 667) were higher than in Lithuania (EUR 610), but lower than in Estonia (EUR 857).

Assessment: Rapidly shrink unemployment and solid economic growth will allow for higher growth of wages in the short-term; however vague outlook of the key export-orientated sectors may curb earnings rally in the future. Nonetheless we increase our forecast to 5% yoy for the end of 2011.

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Lithuania’s gross wages grew by 1.7% in the Q2, compared to the first quarter of 2011. Public sector enjoyed an increase of 2.4%, while in private sector wages went up by humble 1.4%. Annual change in gross wages stood at 2.5% yoy, hitting the DnB NORD estimate.

Despite the highest raise since 2008, jump in wages hardly adds to increasing purchasing power, bearing in mind that average inflation in the same quarter stood at 4.8% yoy. Wages distribution shows uneven pace of economic recovery: most of increase was stemming from public sector while bulk of domestically-orientated activities fell below the average. Several economic activities stood out positively: wages went up by 12.4% yoy in communication and technologies, higher than average growth was recorded in social work and health sector (6.3%), agriculture (5.6%), and transportation (4.4%).

Assessment: Emerging labour market bottlenecks with regard to the availability of skills will demand for higher labour costs. We expect wages to grow by 3% yoy by the end of 2011. However elevated inflation will further weigh on the purchasing power of households this year and in the beginning of 2012.

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Lithuania’s unemployment dipped to 15.6% in the Q2, compared to 17.2% last quarter (according to labour force survey). In Estonia unemployment rate dropped from 14.4 to 13.3%, in Latvia – from 16.6 to 16.2%. Lithuania’s figure was just above DnB NORD estimate (15.5%) and is in line with the annual forecast.

In Lithuania, job growth accelerated in agriculture, construction and retail trade. Graduation in June usually brings an upswing in youth unemployment, however this summer rising economic activity and preparation for the European Basketball Championship are expected to absorb most of it. Emigration has also eased down – during the first seven months 33.1 thousand people left the country, i.e. 29% less compared to the same period last year (46.7 thou).

Assessment: Employment will improve further on the back of solid growth of economic activity. We expect unemployment to reach 13% in Lithuania, 14% in Latvia and 10% in Estonia by the year-end. Admittedly, gradually improving employment figures are expected to increase pressure on labour costs – bottlenecks emerge in the sectors with most visual recovery.

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Estonia’s gross domestic product rose by 8.4% yoy in Q2, according to flash estimate. Compared to Q1, the seasonally and working-day adjusted GDP grew by 1.8%. The result was markedly higher than the consensus and DnB NORD estimate (7.5%). Buoyant expansion confirms the country’s leadership by GDP growth rates among the EU.
Most of economic growth has been stemming from robust, while somewhat decelerating, manufacturing output. Private consumption, judging from the monthly figures, picked up too.
It should be noted, however, that the flash estimate of economic growth has been calculated according to the new Classification of Economic Activities and revised time series, and, therefore, is not comparable to the existing series. Statistics office announced, that the backward corrections may very between -1.4 to +0.6 percentage points due to the methodological changes.

Assessment: Stronger than expected growth does not confirm weaker tendencies in manufacturing yet. The figures are in line with our recently revised upward forecast for 2011 (7%).

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Latvia’s economy proves stronger recovery, with GDP at constant prices up by 5.3% yoy in Q2, after getting a cold shower in Q1, when the GDP estimate stood at humble 3.5% yoy. The figure for Q2 was higher than the consensus (ca 4.5%) and lower than DnB NORD forecast (6%).

The latest real economy indicators suggest that the growth is becoming more balanced, with domestic demand picking up. Moreover, it is likely, that after the GDP revision, the growth indicators for first half of 2011 will be revised upward. Robust tax collection ahead of schedule also proves broader-based recovery. We also believe that sound economic growth will allow fulfilling the general government deficit closer to target of 3% of GDP next year

Assessment: On the back of dynamic rebound in most of activities, we revise Latvia’s GDP forecast upward from 4% to 5% yoy for 2011, however adjust our forecast downward to 3.5% yoy in 2012.

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Annual increase of consumer prices in July was 4.3%, down from 4.8% in June. During the month consumer prices were down by 0.3%, which is not unusual at this time of the year.

The biggest contribution to price changes in July came from the drop in the prices of vegetables with both monthly and annual CPI impacts of around -0.3%. The declines stem from last year’s elevated food price levels that were lifted mainly by floods in Poland and drought in Russia. Aside from that,there was a typical seasonal deflation of clothing and footwear: down 6.3% from June with a contribution to CPI of -0.34%. The strongest upward impact came from gas, fuels and energy products.

Assessment: Due to the worsening expectations about the global economic growth, the prices of co are not likely to increase, what in turn should contribute to the stability of prices in Latvia. Additionally, even though the GDP growth is picking up in Latvia, high level of unemployment will prevent significant internal price pressures.

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We are happy to offer you a new product of DnB NORD MARKETS – snapshots on the key macro indicators and events for the Baltic countries. This product will replace the BRE Weekly reports; however we will maintain sending you the comparative macro tables further on a regular basis.

• GDP of Lithuania grew by 6.1% in Q2
• Lithuania registers EU's second largest increase in retail trade turnover in June
• Industrial production volume in Latvia has grown by 4.1% in June
• Lithuania's six-month budget deficit narrows to 2.9% of GDP in H1

Focus on Lithuania with population of foreign citizens in ANNEX I.

• EBRD: Euro crisis endangers East Europe growth
• UN notes Poland as investment magnet
• Latvia registers EU's only reduction in new industrial orders in May
• Polish Government prepares to build first nuclear power plants

Focus on Poland with EU members’ construction output variation in ANNEX I.

• Construction price index in Estonia increased by 3.2% in the second quarter
• Banks represented in Baltic States passed stress test successfully
• Poland's CPI slows in June
• Producer price index in Estonia grew 5.4% annually in June

Focus on Estonia with EU member states‘ trade statistics in ANNEX I.

• Annual inflation in Latvia reached 4.8% in June
• Unemployment level in Latvia down to 12.6% in June
• Foreign trade turnover in Latvia grew by 10% in May
• Lithuania registers EU highest increase of industrial production in May

Focus on Latvia with household electricity prices in Annex I.

• FDI flow in Lithuania in I quarter 2011 amounted to LTL 800.4 million.
• Retail trade turnover in Lithuania increased the most in Baltics in May.
• Estonia’s Credit Rating Raised to A+ by Fitch.
• Polish parliament approves nuclear power plant bill.

Focus on Lithuania with tax revenues and implicite tax rates in the Annex I.

• Condition of Polish small firms continues to improve.
• Poland ranks 30th in the world in economic stability and investment safety.
• Poland among the cheapest EU countries.

Focus on Poland with price level indices for consumer goods and services in the Annex I.

• Estonian Central Bank: Estonian growth to top 6% this year
• Polish budget deficit lower than expected
• Lithuania corporate profits at nearly LTL 2bn in Q1, 2011
• Estonia to cut income tax rate to 20% in 2015

Focus on Estonia with GDP per capita in purchasing power standards in the Annex I.

• Current account surplus in Latvia increased to LVL 41.3 mln in April
• Eesti Pank: economy needs balanced wage growth
• World Bank: Latvia and Lithuania must control wages to qualify for euro
• Poles moving to the Netherlands instead of Germany

• Moody’s upgrades Latvia's rating outlook to positive
• Vilnius increased ranking in ICCA statistics 2010
• Annual inflation in Estonia made 5.4% in May
• Fewer Poles working in German agriculture

Focus on Lithuania with level of broadband internet access in the Annex I.

• Poland's economy expands 4.4% yoy in 2011 Q1
• Poland may cut 20,000 public sector jobs
• Greece may pose threat to Poland's public finances
• Polish unemployment not shrinking at predicted rate

Focus on Poland with The Global Venture Capital and Private Equity Country Attractiveness Index in the Annex I.

• Ministry: price of electricity in Estonia to go up by about 20% in 2013
• Number of visitors in Latvian hotels increased by 29% in Q1
• Kaunas airport awarded as quickest growing in Europe
• Poland raises GDP growth forecast

Focus on Estonia with The World Competitiveness Scoreboard 2011 in the Annex.

• IMF: Eastern Europe’s economy to grow 4.3% in 2011, 2012
• Lithuania records EU's second largest increase in exports in January-February
• Estonia posted EU's largest growth in industrial output in March
• Latvia's timber export reached 274.802 mn LVL in Q1; growths 33%

Focus on Latvia with European Commission Spring 2011 GDP forecast in the Annex

· AHK survey: German companies in the Baltics are optimistic

· Polish firms to spend 3 bn PLN on wind power investments

· Estonia‘s exports grew by 71% y-o-y

· GDP of Latvia grew by 3.4% in Q1

Focus on Lithuania with AHK‘s Investment Environment Ranking in the Annex I.

• Fitch raises Lithuania's outlook to positive
• Polish banks to see 2011 takings rise 25%
• Polish mortgage sales finally see strong growth
• Poland's public spending-to-GDP ratio increases

Focus on Poland with Total industry turnover index of intermediate and capital goods 2010 in the Annex I.

• Latvian government predicts 3.5% average inflation in 2011
• Standard & Poor's upgrades Estonia's rating outlook to "positive"
• 2012 Poland increases the minimum wage by 8,2%
• Nearly a half of Estonian businesses promise to raise wages

Focus on Estonia with Summer season tourism trends in 2010 in the Annex I.

• More than half of Lithuanian business people expect 4-6% GDP growth this year – survey
• Estonia’s annual inflation 5.2% in March
• Poland’s president signs amended pension bill into law
• IMF recommends Latvia refinancing loan on international financial markes

Focus on Lithuania with The Networked Readiness Index 2010–2011 in the Annex I.

• Monetary Policy Council Raises All Interest Rates By 25 Base Points
• Poland‘s cabinet adopts 2012 budget guidelines
• Polish remittances expected to hit new record in 2011
• Fuel prices set to rise higher in Poland

Focus on Poland with Knight Frank Global House Price Index Q4 2010 in the Annex I.

• Latvia‘s government retains restrictions for various social benefits until end-2014
• PM: Reduction of cash payments volume in Lithuania will first be focused on public establishments
• Estonian general government budget was in small surplus in 2010
• Poland‘s double-digit industrial production growth

Focus on Estonia with International Property Rights Index 2011 in the Annex I.

• Polish central bank head: rate hikes expectations are too high
• World Bank: Poland lags behind on innovation
• Lithuanian housing prices go up in Q1 from Q4
• Lithuanian corporate sector back in black in 2010

Focus on Latvia with KOF Index of Globalization 2011 in the Annex I.

• Rating agencies upgrade Latvia‘s ratings and outlooks
• Lithuania raises 2011 economic growth forecast to 5.8% from 2.8%
• OECD: Poland‘s composite leading indicator slightly down
• Estonia‘s external debt declined 15% in 2010 from its boom-time peak

Focus on Lithuania with inflation rates in the Annex I.

• Polish government approves changes to pension system
• Polish labour market growth to speed up
• Polish GDP growth to slow after 2011 - NBP inflation report
• Poland’s air freight traffic increases

Focus on Poland with Travel & Tourism Competitiveness Index 2011 in the Annex I.

• EC: Poland's GDP seen growing by 4.1% in 2011
• Latvia: government plans reducing budget deficit to 5% of GDP
• Estonia to ease restrictions for EU citizens and companies to buy land
• Lithuania's average gross earnings rise in Q4

Focus on Estonia with Global Property Guide‘s House Price Survey in the Annex I.

• Higher taxes in Latvia will come into force from July 1
• Average monthly gross wages up 3.9% in a year in Estonia
• Baltic countries post fastest growth in car sales in Europe in January
• Poland‘s inflation shoots up

Focus on Latvia with European Airport Traffic Trends 2011 in the Annex I.

• Poland's January CPI surprises on upside
• Estonia's economic growth driven by vigorous exports in manufacturing
• Bank of Lithuania ups growth forecasts
• Latvia's stability cuts default risk below Lithuania

Focus on Lithuania with FTTH Global Ranking in the Annex I.

• EconMin: Polish economy grew 4.3% in Q4
• Polish banking sector assessed as stable by Fitch
• Mortgage borrowers to be relieved from insurance costs
• Polands budget signed into law

• 2010 was successful for Estonian industry
• Central banker: Lithuania‘s banking sector achieved breakthrough in 2010
• Latvia‘s retail trade turnover reduced by 2.2% last year
• Poland‘s economy grew 3.8% in 2010 - preliminary estimate

Focus on Estonia with Innovation Union Scoreboard 2010 in the Annex I.

News highlights in the Baltic Rim region:

• Foreign investors urge Latvian government to continue tax reforms
• Estonian economy ministry paid EUR 75 mn of business grants
• Lithuanian PM: attracting investors would bring back qualified emigrants
• Poland decides to raise rates on inflation fears

Focus on Latvia with Value Added Tax Rates in EU Countries in the Annex I.

• World Bank : Polish GDP growth seen at 4.1% in 2011
• Latvian central bank keeps benchmark rate at 3.5%
• Ligi: Estonia‘s inflation acceleration is nothing tragic
• Lithuania‘s current account surplus declines in November

Focus on Lithuania with the Quality of Life Index 2011 in the Annex I.

• Poland's 2010 exports jump 10.7% yoy
• Salary report: directors saw biggest wage increases in 2010
• Record year for Polish sea ports
• LaborMin: Poland's unemployment rate increases

Focus on Poland with the 2011 Index of Economic Freedom in the Annex I.

• Central bank: Latvia to grow 3.3% in 2011
• Cumulative FDI in Lithuania up 1.5% in Jan-Sept 2010
• Estonian industrial output 35% higher than a year ago
• Illegal employment on the rise in Poland
  

Focus on Estonia with the 2010 Legatum Prosperity Index Rankings in the Annex I.

• Estonia sees Euro in 3 days: polls in favour of European currency has dropped
• Latvian economy: no further tax increases planned in next three years
• Warsaw Stock Exchange sixth-largest in Europe
• Eurobarometer: 59% expect new member states to join the euro area by 2015 at the latest

Focus on Latvia with Eurobarometer summary on Introduction of the euro in the new Member States in the Anex I.

• Latvia may return to eurobond market next year, Minister of Finance Vilks says
• Eesti Pank sees economy to grow by 3.9% and annual average inflation to reach 3.5% in 2011
• President of Lithuania calls for a pause in nuclear plant project
• EBRD: Poland’s main goal for 2011 is making focused efforts to reduce its deficit

Focus on Lithuania with the Climate Change Performance Index 2011 in the Anex I.

• EC has agreed that the costs of pension reform will not be included in calculating Polish public debt
• Public administration employment reduction plan is slated
• FinMin: Poland's public debt up 3.5% in Q3
• From the beginning of next year Belarus, Georgia, Moldova, Russia and Ukraine citizens won’t need a
  work permit to be employed in Poland

Focus on Poland with the Child Labour Index 2011 in the Anex I.

• Estonia passes 2011 budget, aim at 1.6% deficit
• Apartment prices are up in the Baltic region
• In 2009 the ratio of R&D expenditures to GDP in Estonia reached 1.42%
• Estonian annual inflation reaches 5.3%

Focus on Estonia with the Electricity Prices for Household and Industrial consumers in the Anex I.

• Latvian unemployment down to 18% in the 3rd quarter
• Latvian govt supports increasing VAT rate by 1 p.p.
• Lithuania unbundled gas sector despite protests from Moscow
• Decline on Estonian construction market turned to increase

Focus on Latvia with the Top 100 Outsourcing Cities in the Anex I.

• Producer prices in Latvia increase
• NASDAQ OMX Vilnius switches to euro
• Latvian government approves increasing annual motor vehicle tax
• Estonia’s participation in EU aid package is EEK 12.4 bn

Focus on Lithuania with the Migration and Remittances of the EU Member States in the Anex I.

• Polish inflation rates are still on the rise
• Stock returns in chemicals and mining were rising this week
• Privatization of Enea returns to competitive negotiations
  

• IIIQ GDP flash estimate in Estonia: annual growth of 4.7%
• Estonia’s exports up 40% yoy in September
• Warsaw Stock Exchange privatization a huge success
• Latvia’s inflation reaches a 14-month high

Focus on Estonia with the Ease of Doing Business 2011 Rankings in the Annex I.

• Latvia’s 2011 budget will be last with severe cuts in spending
• Lithuanian president thinks that red tape's sun has not set yet - presidential adviser
• Estonia GDP probably grew annual 6% in IIIQ, Finance Ministry says
• Exports in Estonia grew 37% yoy while in Lithuania it grew only 0.9% yoy in August

Focus on Latvia with the Corruption Perceptions Index 2010 in the Anex I.

• Latvia’s overdue loans 28.5% of all credits at end of September
• President: Lithuania has good prospects for Chinese investment
• Lithuanian retail trade turnover up by 6.1% yoy
• Estonian third-quarter bank profits the highest in 2 years

Focus on Lithuania with the European Union Gender Gap Index 2010 Rankings in the Anex I.

• Inflation in Poland is on the rise
• Polish industrial output rose by 11.8% yoy in September
• Salaries have dropped 0.5% from Q2 to Q3 this year

Focus on Poland with the The Global Gender Gap Index 2010 Rankings in the Anex I.

• Lithuanian youth emigration is on the rise due to unemployment
• NASDAQ OMX Vilnius will change the currency for trade and payment to euros
• Apartment prices in Tallinn are 17.6% higher than last year
• EU funds running out for Estonia's labor market policies, state aims to use unemployment insurance
  reserves

Focus on Estonia with the Highest Rate of Personal Income Tax in the Anex I.

• Poland not pleased with EC plans on implementing new penalties for fiscally undisciplined countries
• 49% of Estonian population supports transition to the euro
• Estonian inflation accelerates at fastest rate since early 2009
• Latvia's industrial output up 20.5% in a year in August

Focus on Latvia with the oil indicators in the Anex I.

• Exports in Estonia grew by 32% and imports by 23% this summer
• Baltic states to delay launch of joint power market
• Poll: A bit over a half of Estonians support the euro
• Lithuania retail sales increase in august

Focus on Lithuania with the HIPC Annual Range of Change in the Anex I.

• Unemployment rate seen slightly below forecast at the yearend
• Public finance sector deficit seen above PLN 100 bn in 2010
• Small business confident Polish economy is getting better
• Poland determined to dell Energa Power to PGE despite anti-monopoly body’s objections

Focus on Poland with the Members of IMF and IMF lending in the Annex I.

• Minister of Finance moots new tax on Polish banks
• Estonian coalition agrees to make deficits illegal except in contractions
• Polish inflation stays at 3 year low in August, keeping rate rise on hold
• Estonia 33rd, Lithuania 47th, Latvia 70th in Global Competitiveness Index

Focus on Estonia with The Global Competitiveness Index 2010-2011 rankings and 2009-2010 comparisons in the Annex I.

• Poland: budget bill accepted but being criticised
• Lithuanian government sees faster inflation and higher unemployment in 2010
• “Fitch Ratings” upgrades Latvia's rating outlook
• Trichet: Estonia's eurozone preparations are on track

Focus on Latvia with the real unit labour cost growth in the Annex I.

• PM of Lithuania: budget, energy, reform of state-owned companies in focus in the new political season
• Eurozone lower reserve requirements might favour Estonian economy
• Poland's GDP figures beat expectations: domestic demand fueled the fastest growth since 2008
• Estonia and Latvia on bottom of the EU according to the youth unemployment

Focus on Lithuania with the Enabling Trade Index 2010 rankings and 2009 comparison in the Annex I.

• Moody's: Polish GDP to grow 2.7% in 2010
  
• Polish industrial output expands more than 10% for the 3rd month
  
• Poland's labor productivity increased by 12.3% yoy in the January-July
  
• Manufacturing sentiment edges up in August

 Focus on Poland, with the E-Government and E-Participation Indices in the Annex I.

• Latvia and Estonia lead Europe by the size of shadow economy;
• Budget revenues exceed expectations in Lithuania and Estonia;
• Capital Economics raises GDP outlook for Baltic region;
• Polish average wage rose in Q2 despite higher unemployment.

 Focus on Estonia, with the World’s Best Countries ranking in the Annex I.

• Dombrovskis: The recession in Latvia is over;
  
• Estonia's GDP grew by 3.5% yoy in Q2 supported by industrial sector exports;
  
• President Valdis Zatlers has promulgated the Insolvency Law;
  
• State Treasurer: Latvia does not require entire agreed loan amount;

Focus on Latvia, with Global Peace Index Rankings 2009-2010 in the ANNEX I.

• Latvian overdue loans at 28.6% of total credits
  
• Estonian real estate market showed growth in Q2
  
• Lithuania's H1 central govt deficit at 4.3% of GDP
  
• Polish govt agrees to new financial plan by introducing VAT rates at 5%, 8% and 23% as of 2011

Focus on Lithuania, with Inward FDI Performance Index Rankings 2006-2009 in the ANNEX I.

• Poland’s Finance Minister against too many privileges for foreign investors
  
• Retail sales in Poland surge, while unemployment drops
  
• EBRD: A key challenge in Poland - to preserve financial stability and to counteract the adverse effects on the real economy stemming from financing constraints
  
• Polish ports see H1 shipping-freight rate boost

Focus on Poland, with The Big Mac Index in the Annex I.

• Fitch upgrades Estonia credit rating on euro outlook
• Latvia‘s state treasury holds largest amount of money in its history
• FDI Inflow to Poland up by 50% yoy
• Estonia ranked fourth in EU in terms of price growth in June

Focus on Estonia, with the EU country rankings according to the Women's Economic Opportunity Index in the Annex I.

• Lithuania's budget revenues 8.3% above target in H1
  
• EU finance ministers give final approval for Estonia in euro zone
  
• IMF: Lithuania's fiscal deficit may reach 7.75% of GDP in 2010
  
• Economy Ministry of Poland: industrial output seen rising in June

Focus on Latvia, with Failed States Index 2010 in the Annex I.

• Estonia’s industrial output growth slowed down to 17% a year
• The number of corporate bankruptcies in Lithuania was up by 92.6% last year
• FDI in Lithuania rises 0.6% in Q1 qoq
• Latvia’s "Parex“ new bank to be called "Citadele banka"; license issued
  

Focus on Lithuania, with Economist Intelligence Unit digital economy rankings, 2010 in the Annex I.

• Polish industrial output shows fastest increase in last two years
• Poland's GDP growth seen around 3% in Q2
• Poland applies for new IMF credit line
• Poland’s state treasury debt increases further

Focus on Poland, with the aggregate replacement ratio in the European countries in the Annex I.

• Ansip: Estonia needs to become a Nordic tiger
• Most favorable climate for microenterprises in Baltics is Lithuania
• World Bank: Poland shouldn't cut budget too quickly
• Lithuania plans further austerity measures in 2011

Focus on Estonia, with the industry production index in the European countries in the Annex I.

• Bank of Latvia predicts further reduction of unemployment rate
• Latvia's GDP reduced 6 pct in Q1
• S&P raises Estonia's credit rating on euro accession
• Exports growth at a four-year high in Estonia

Focus on Latvia, with Quality of Living and Eco-City Ranking, Top 50 in the Annex I.

• Dombrovskis: Latvia to quickly split Parex Banka
• Latvia's average wage fell 8.3% year on year
• EC president does not predict when Lithuania could adopt euro
• Lithuanian unemployment rate reached 17.4% in the 1st Q of 2010

Focus on Lithuania, with the country ranking according to the registered Broadband speed in the Annex I.

• Poland's unemployment seen falling - GUS Deputy Head
• Monetary policy council leaves interest rates unchanged
• Poland has up to PLN 30 bn in new revenues - Boni
• Austrian Developers: Poland is a Stable Market

Focus on Poland, with the Broadband penetration rate in 2009 in the Annex I.

• The European Central Bank and the European Commission assessed Estonia's euro readiness
• IMF says Lithuania needs more fiscal adjustment
• Estonia climbed by one position in the competitiveness list, while Lithuania dropped by 12
• Bank of Estonia: labour market situation to improve in H2 of 2010

Focus on Estonia, with the Competitiveness Scoreboard in the Annex I.

• Latvian retail trade turnover up in March
• Estonia's stabilisation reserve still contains nearly EEK 5 bn
• Central bank of Estonia expects lower growth, faster inflation
• Economy minister: Poland's GDP will grow by around 3% in 2010

Focus on Latvia, with the number of nuclear power reactors worldwide, eop, 2009 in the Annex I

• Estonian exports at current prices grew by 24% in February year-on-year
• Lithuanian industry output rises year-on-year for the first time since 2008
• Poland’s general government deficit widened to 7.1% of GDP last year
• IMF raises 2010 economic growth forecast for Eastern Europe to 2.8% from 2%

Focus on Lithuania, with country ranking according to the general government consolidated gross debt ratio to GDP in the Annex I.

• Poland's rate council could raise interest rates once or twice by the end of the year
• In February 2010 Poland's export grew by 20.1%, while imports jumped by 22.3% yoy
• Polish-Russian economic cooperation likely boosted by warmed relations
• Poland will get a reward from EU for its strong economic performance

Focus on Poland, with the rankings according to the ICT Development Index in the Annex I.

• Institute of Economic Research: Estonian economy weakened in the Q1, seen to improve in 6 months
• Estonian inflation hike raises concerns about euro
• New budget cut looming in Estonia as tax revenues fall short of budget
• Poland need not extend flexible credit line from IMF - dep PM

Focus on Estonia, with the rankings according to the Global Innovation Index in the Annex I.

• Polish external debt at 59.4% of GDP
• World Bank believes public sector salaries in Latvia are high
• Estonian overall tax ratio was 36% of GDP in 2009
• Lithuania's central government deficit at 1.4% of GDP in January-February

Focus on Latvia, with the Network Readiness Index in the Annex I.

• Moody’s raises rating outlooks for Lithuania and Latvia
• Latvia’s State employment service: the registered unemployment rate reached 17.3% in mid-March
• Estonia eyes euro with budget deficit in 2009 down to 1.7% of GDP
• Estonian industrial production rose in February 4.8% yoy

Focus on Lithuania, with Environmental Performance Index in the Annex I.

• Central Statistical Office: Poland’s net financial result of banking sector dropped by 36.3 %
• UBS expects Poland’s economy to grow by 3 % in 2010
• Poland's public debt at the end of 2009 totaled 51.8 % of GDP
• Estonia’s 2010 International Property Rights Index is the highest among the Baltics

Focus on Poland, with comparative structural indicators for all Baltic Rim countries and the International Property Rights Index in the Annex I.

• IMF: Latvia narrowed deficit more than planned
• Estonia's economy fell 9.5% in fourth quarter
• Fitch: Lithuania's economy to expand by 1% in 2010
• Poland’s deficit grows faster than expected

Focus on Estonia, with the country ranking according to the globalisation index in the Annex I

• In January Latvian industrial production rose yoy for the first time in 21 months
• Fitch raises Lithuania’s rating outlook from negative to stable
• Deputy FM: Poland's GDP growth to be slow but steady
• Estonia on top of EU by quarterly growth, on bottom by annual growth

Focus on Latvia, with the “Cities and Regions of The Future” Rankings in the Annex I.

• In 2009 Estonian exports decreased 24% and imports 33% compared to 2008
• Lithuanian unemployment rate rose to 15.6% in Q4
• Average monthly earnings in Latvia dropped by 3.9% y-o-y in 2009
• Govt official: Poland’s deficit is expected to shrink this year

Focus on Lithuania, with the Economic Sentiment indicator among the EU economies in the Annex I.

• UNCTAD: Poland's 17% drop in FDI in 2009 the lowest in the region, with other CEE suffering 50-63% decreases
• The number of Polish companies in 2009 has decreased for the 1st time in five years
• Polish industrial production grew by 2.5% in January
• The Finance Ministry expects economic growth this year close to 3%

Focus on Poland, with the industrial production dynamics in the EU in the Annex I.

• Estonian economy fell 9.4 % y-o-y in Q4
• Estonia down to 35th in competitiveness rank, the best result among the Baltics and Poland
• The current account surplus in Latvia amounted to 8.8 % of GDP in 2009
• Lithuanian Labor Exchange: despite economic stabilization the unemployment will grow in 2010

Focus on Estonia, with the country ranking according to the Global Competitiveness Index in the Annex I.

• IMF: The forecasted growth of Lithuania’s GDP is 1.6%
• Lithuanian govt successfully issued 10-year bonds worth USD 2 bn
• Latvia's GDP rose 2.4% in Q4 last year, down by 17.7% y-o-y
• Estonia’s 2010 Index of Economic Freedom is the highest among the Baltics

Focus on Latvia, with the country ranking according to the Index of Economic Freedom in the Annex I.

• Minister of Finance: Lithuanian GDP may grow 1.6% (previous forecast -4.3%)
• Lithuanian government debt accounted for 27.8% of GDP at the end of last year
• Convergence report: Poland aims for 3% deficit by 2012
• Latvia must fulfill Maastricht criteria to achieve economic sustainability - Zatlers

Focus on Lithuania, with the results on ICT usage in enterprises last year in the Annex I.

• EBRD bullish on Poland's economic output for 2010
• Polish Banks' Performance Better than CEE Peers – Fitch Ratings
• Estonian central bank sees loan provisions going down
• J. Almunia: Lithuania is to correct its budget deficit by 2012

Focus on Poland, with the statistical indicators on new heavy commercial vehicles registration in the Annex I.

• 2009 was record year of dividends in Estonia
• Latvian central bank chief: Estonia's euro adoption to attract investors away from Latvia
• Lithuanian PM to visit U.S. and 'hunt' for investments
• Pushing inflation down easier than curbing budget deficit, says NBP head

Focus on Estonia, with the country ranking according to the fresh Logistics Performance Index by the World Bank in the Annex I.

• IMF: Estonia's exchange rate at a right level for euro switch
• Survey puts Poland in top place to do business in CEE
• Quality of Life Index: Lithuania rated the best country to live among the Baltics
• Value of real estate transactions plunged in Estonia

Focus on Latvia, with the country ranking according to the Quality of Life Index 2010 in the Annex I.