(Bloomberg) -- Battered more than most by the 2008 crisis and restrained by trade spats with neighboring Russia, the three Baltic economies maybe aren’t Europe’s most likely outperformers.
But that’s just what they’ve become, according to the European Central Bank. Number crunching in an ECB report this week revealed that growth in gross domestic product per capita since 1999 far exceeded expectations in Estonia, Latvia and Lithuania. Behind the success are low debt, rapidly improving institutions and policies favoring business and free markets.
“The Baltic states are among the few euro-area countries, along with Slovakia, in which real GDP per capita in purchasing-power-standard terms has shown substantial convergence toward the EU average,” the ECB said.
Many of the continent’s ex-communist countries have already joined the European Union and some -- like the Baltics -- have adopted the euro. While the goal is for incomes to match those in the bloc’s richer western wing, a chasm remains: the Baltic region’s 2015 per capita income was still only two-thirds of the 15 nations that made up the EU before its 2004 expansion wave. Lower salaries have stoked an exodus to better paying jobs elsewhere.
Despite the ECB’s positive report on the Baltics, and surging GDP expansion this year, locals are less enthused. The latest Eurobarometer survey shows that only about a quarter of Latvians and Lithuanians consider their economies to be “rather good” or “very good,” less than half the result for the Czech Republic and Poland.
Maybe they should be paying more attention to the ECB’s reports.