baltic tiger

Baltic Tiger is a term used to refer to any of the three Baltic states - Estonia, Latvia and Lithuania - during their periods of economic boom, which started after the year 2001 and continues up to the present moment. The term is modelled on East Asian Tiger and Celtic Tiger, which were used to describe the economic boom periods in parts of East Asia and the Republic of Ireland, respectively. After 2001, the Baltic Tiger economies implemented important economic reforms and liberalisation, which, coupled with their fairly low-wage and skilled labour force, attracted large amounts of foreign investment and therefore economic growth. Between 2001 and 2004, the Baltic Tiger states had the highest growth rates in Europe, and this is expected to continue in 2005 and onwards. In 2003, for example, Estonia grew by 4.7% in gross domestic product, while Latvia grew by 7.4% and Lithuania by 9%. Additionally, Estonia is among the top five most liberal economies in the world, and Lithuania and Latvia have been praised for their macroeconomic stability, especially low inflation and low budget deficits. These economies are predicted to continue growing at a high rate of 5-10% for at least until 2010. In the 2000-2010 decade, gross domestic product is expected to rise dramatically, similar to what happened in Ireland during its 1990s economic boom. While their GDP per capita is at approximately 50% of the European Union average at the present moment, they are expected to converge in income, even though EU average income is not expected to be reached in the near future. Even their present status at 50% of the EU average is a remarkable improvement in such a short time, considering that in 1999, Latvia and Lithuania had a GDP per capita at only 25% of the EU average. In 2005 and onwards, Latvia and Lithuania are expected to grow at a higher rate than Estonia, due in part to the fact that they had longer periods of economic decline and stagnation in the 1990s. Estonia, however, has a higher rate of foreign investment and a higher GDP per capita.

Baltic Tiger

See also