Eastern Europe’s Growth Rate Expected to Slow

“The Baltic economies of Estonia and Lithuania will probably slow from first-quarter peaks as capacity constraints limit exports, their main growth engine, and demand from abroad wanes, analysts said.

Having been hit hard by the global economic crisis, Estonia and Lithuania notched the quickest growth rates in at least three years as austerity helped improve competitiveness, which fuelled exports and manufacturing. Their pace was the fastest among European Union nations that have reported first-quarter data. Latvia also outpaced most developed nations.

The pace of expansion may not be sustained because factories are approaching full production capacity at the local units of companies such as Ericsson AB and Elcoteq SE (ELQAV), said analysts including Neil Shearing at Capital Economics. The comparison with slower growth in the beginning of last year will also disappear, crimping future GDP data, they said.”

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