Baltic economies in 1998-1999 : Effects of the Russian financial crisis

Abstract

Russian August 1998 economic crisis effected Baltic countries more than was expected.Estonia, Latvia and Lithuania have sunk into recession.Russia remained a key trading partner and a sizeable market for all three Baltic republics exporters also after the declaration of independence despite the sometimes tense political situation.Current year s figures show a heavy decline in Baltic s exports to Russia and also decline in the growth of these economies.Growth forecasts for each Baltic country have been revised down.Food and beverage as well as processing industries as a whole have suffered the most.The decline of purchasing power in Russia due to the rouble devaluation and the weaknesses in the Russian economy will restrain Baltic countries exports to Russia for years to come. Keywords: Baltic countries, foreign trade, Russia