Lithuanian Economy Shrank 22.4%, EU’s Worst Recession ... and Blonde Parade helps Latvia

Bloomberg

Lithuanian Economy Shrank 22.4%, EU’s Worst Recession (Update2)

By Milda Seputyte

July 28 (Bloomberg) -- Lithuania’s economy plunged a preliminary 22.4 percent in the second quarter, the worst recession since 1990 independence, as output crashed and retail sales slumped.

The decline, the deepest in the European Union, compares with a revised 13.3 percent contraction in the first quarter, the Vilnius-based statistics office said in an e-mailed statement today. The economy grew 5.2 percent in the same period last year. The median estimate of four economists in a Bloomberg survey was for a 17.7 percent decline. The economy shrank 18.1 percent through the first six months.

The Baltic economies of Estonia, Latvia and Lithuania are collapsing after a real-estate bubble burst, cheap credit evaporated and slacking demand in foreign markets undermined exports. The three countries, which had the EU’s fastest growing economies from 2004 to 2006, now have the steepest declines of all developing regions, the World Bank said on June 22.

“I checked whether I didn’t go blind,” said Violeta Klyviene, the chief Baltic economist at Danske Bank. “It’s either the bottom or we’ll see one in the third quarter.”

Stockholm-based SEB AB, the largest bank in Lithuania, and Swedbank AB, the biggest bank in Estonia and Latvia, face soaring loan losses in the Baltic states, which are suffering from the deepest recessions in the European Union.
...

more at link above

Related:

Maybe they should also have had a Blond Parade. I recommend this everywhere.

Latvia spirits boosted by the blond parade
www.buzzfeed.com...

[atsimg]http://files.abovetopsecret.com/images/member/11322c574759.jpg[/atsimg]

[atsimg]http://files.abovetopsecret.com/images/member/82b679373dc6.jpg[/atsimg]

[atsimg]http://files.abovetopsecret.com/images/member/dd632b94fd2c.jpg[/atsimg]


[edit on 28-7-2009 by Dbriefed]

Hmm - poor hungry sexy desperate blonde women - hmm - I hate myself, but all I see is an 'economic opportunity' haha.

On a serious note though -I understand that Lithuania, Latvia, Estonia, and Bulgaria pegged their currency to the Euro. This is has had a catalytic effect on the downturn of their economies.

According to reports, Swedish banks tend to be fairly exposed to possible defaults, I think I read $US 75 billion - doesn't seem like a lot, but these places are small, in all respects.

Well - I would have more to say regarding the blonds here - but I value my membership - so all I can say is, I would be happy to offer a liquidity injection, and mutually satisfactory economic relief arrangement. Apologies to the moderators if my innuendo is deemed inappropriate - please snip - but don't punish me! I'm only human ..

[edit on 28-7-2009 by Amagnon]

Dbriefed

Hehehe. You sent mixed messages...It was hard to be concerned after the Blonde parade.

Anywho, a 22.4% contraction is very scary, and Eastern Europe may weight heavily on the markets again.

22% seems HUGE .. but to be honest you have to look at this a few ways. Then decide if it is as catastrophic as it sounds.

1. Lithuania is about the size of a New England state here in the US .. so it's not a massive economy by anymeans.

2. Technically speaking as with most of Eastern Europe, it is an emerging economy, however it is the most developed of all post-soviet states.

3. Average economic growth for the past few years has been 6-8.5% annually.. this is pretty impressive, but again, when your a small developing country, you have higher swings both ways.

4. Surprisingly for any Eastern European country it's unemployment in 2008 was only 4.7% .. that's considerably less than most major economies like the US, Uk, France, Germany etc.

5. Unlike other economies who exported citizens across the EU to lower unemployment (Poland, Czech etc) they actually built up a huge financial center and infrastructure.

6. Lithuania had (see had) one of the highest personal income levels in the EU.

So taking into effect that, yes, it IS an emerging economy by all means, it had high economic growth, and hundreds of billions in international development.. while also acknowledge the fact that 22% decline after such massive growth is simply astounding. To go from the fastest growing to fastest declining in such a short amount of time..

But the story of Lithuania isn't much different than the rest of the Eastern European nations. We can safely assume that Lithuania, while it had an excellent economy and economic growth for the past few years, not much of it was actual "wealth" generating .. basically an economy built around numbers, but the numbers didn't tell the whole story. The largest portion of the Lithuanian economy was Construction. It's the same all over Europe. Ireland, Lithuania, Poland, Czech, the Baltics, Romania, the list goes on and on .. credit levels decline to the point where it's essentially "free money" .. The West comes into a region completely undeveloped and pumps hundreds of billions into these economies and construction booms occur.

But it wasn't real wealth.. it was over leveraged fake wealth .. and when it disappears.. so do the economies that depended on it.

So the Lithuanian economy didn't really "crash" .. it merely came to the realization that there wasn't much of an economy to begin with.

If you build a house.. you don't create wealth. You spend wealth. If your whole economy is based on building houses and malls.... but you are not producing what is being sold, or the people living in the houses are not working to manufacture a good .. then you have an economy built on numbers. That's incredibly dangerous, you cannot build infinity .. it must end, so so will the mirage of wealth that came with it. Hopefully for Lithuania it will be a wake up call. 22% decline will be bad for Lithuanians on a whole as far as unemployment, but given the state of the economy I don't see it as catastrophic as they are still developing. And judging by the fact that so much depended on construction, hopefully they will turn it into a good thing and re-adjust their economic policies.

reply to post by Rockpuck


A HUGE post in reply - and all you talked about was the economy? Is your monitor in braille? Did you not see hot blonds? Is it only me?

Regardless - nice post - good luck on fixing your eyesight!

There is chatter that eastern and Latin Europe are both going to impact seriously on the Euro - although the countries listed above I don't believe actually use it - they still have substantial debt in Euro denominated countries.

EDIT TO NOTE: I live in Asia - surrounded by brown skinned, dark eyed brunettes all the time, we call the girls pictured "Pinkies" on account of their skin color - very rare to see hot Caucasian girls where I live. I guess I have spent too much time out of Caucasian countries - I think I feel a sudden need to go and help develop better relationships with Eastern Europe!

[edit on 28-7-2009 by Amagnon]

Ah, so my evil test worked as planned! I wanted to see if images of beautiful women would distract us from the bleakest of numbers. And, there's no contest. Latvia is on to something, a parade of beautiful Blondes does take minds off of a bleak economy.

As far as Lithuania, I don't understand the economy there, but it's interesting to know that construction powered the economy of central and eastern Europe. I've been to the Czech republic, and much of the city of Prague is well built and designed to last centuries. Some of the outlying neighborhoods have remnant communist-era large gray apartment buildings that were built cheaply. I wonder which is better for the economy, strong permanent assets, or cheap assets you have to replace.

Back to what's beautiful, I think I have a vacation coming up....

anymore pics of the blonde parade. that # cheered me up

Screenshots or it didn't hap....

oh wait, nice! Reminds me of the T-Mobile commercial where they send Catherine Zeta Jones to people's houses.