Category: Balttia


In February Estonian retail sales fell by 18 pct yoy

Filed Under: Balttia, Construction, Olvi by pietrox — Leave a comment
31/03/2009

In February 2009 compared to February of the previous year the retail sales of goods of retail trade enterprises decreased 18% at constant prices, Estonian Statistics announced.

The decrease in retail sales of goods, which had begun in March 2008 compared to the corresponding month of the previous year, remained within 1–10% till January of this year. But in February the retail sales decreased to the lowest level so far. The melting-down economy and the resulting decline in consumer confidence contributed to this trend. The confidence indicators reflected in the consumer survey organized by the Estonian Institute of Economic Research also showed a continuous falling trend in February.

In February, the retail sales of goods of retail trade enterprises were 4.1 billion kroons. Compared to February 2008, the retail sales of goods decreased in most economic activities. The decrease in retail sales was most influenced by the stores selling manufactured goods, where retail sales decreased 27% compared to the same month of the previous year. The greatest decrease was recorded in the retail sales of other specialized stores and non-specialized stores as well as stores selling household goods and appliances, hardware and building materials.

Retail sales in grocery stores decreased by one tenth compared to February of the previous year. Consumers are continuously hesitant about the future and have started to restrict their expenditure on food ever more due to that.

Compared to January, the retail sales of goods in retail trade enterprises decreased by 7% at constant prices. According to the seasonally and calendar-based adjustments of data, the retail sales decreased 2%.

In February the revenues from the sales of retail trade enterprises were 4.9 billion kroons, out of which retail sales of goods accounted for 85%. Compared to February of the previous year, the revenues from sales decreased 21% at current prices. Compared to the previous month, this indicator decreased 7%.

(bbn.com)

Comment

Latvia Faces June Bankruptcy If IMF Loan Halted, Premier Says

Filed Under: Balttia by pietrox — Leave a comment
09/03/2009

March 9 (Bloomberg) — Latvia faces bankruptcy in three months if it fails to deliver budget cuts required by the International Monetary Fund and the next installment of its bailout is delayed, Premier-designate Valdis Dombrovskis said.

“If we do not continue to receive this international loan, then we go bankrupt in June,” Dombrovskis, 37, said in an interview on March 6.

Latvia, in the grip of the severest crisis since independence in 1991, was granted a 7.5 billion-euro ($9.5 billion) bailout last quarter after the economy shrank 10.5 percent and the state seized its second biggest bank. The government fell on Feb. 20 after agreeing to budget cuts needed to keep the deficit below 5 percent of gross domestic product.

Dombrovskis wants the IMF to approve a deficit of 8 percent of GDP to avoid crippling the economy. Latvia must cut the budget to meet terms of the bailout or get a bigger loan from the IMF- led group and European Commission or it will run out of money.

“It’s hardly possible” to keep to the earlier target, Dombrovskis said. “The previous memorandum of understanding was signed under the assumption of a 5 percent recession, meanwhile the forecast is for 12 percent and it may get worse.”

Latvia faces a deepening contraction as its currency peg to the euro forces it to push through wage cuts to remain competitive. The economic collapse threatens to spread through the whole Baltic region, and there may be need for a broader bailout that includes Lithuania and Estonia, Dombrovskis said.

‘Domino Effect’

“In the Baltic region there is a fear of a domino effect, if one country would go, then probably the whole region will go,” he said. Any plan “could talk about all three countries, with a focus on Latvia as its weakest link.”

Last quarter, Estonia’s economy shrank an annual 9.4 percent, the most in at least 15 years, while Lithuanian GDP contracted for the first time in nine years, shrinking 2 percent.

Bankruptcy in Latvia would also affect Sweden, Dombrovskis said. Swedish banks have claims in Latvia, Lithuania and Estonia worth about $75 billion, according to ING Groep NV.

Standard & Poor’s cut Latvia’s credit rating to junk on Feb. 24, lowering the country to BB+ from BBB-. Credit-default swaps for Latvia soared to a record 1,109 basis points on March 3, the highest in the EU.

Dombrovskis’s five-party coalition, which may be confirmed by a parliamentary vote this week, is planning to cut spending by 360 million lati ($642 million) instead of the 700 million lati that would be necessary to keep the deficit under 5 percent.

Comment

Banks Move to Free Up Eastern Europe Lending

Filed Under: Balttia, Olvi by pietrox — Leave a comment
27/02/2009

hree big development banks Thursday said they will offer €24.5 billion ($31 billion) in financing for struggling banks in Eastern Europe and some of their customers, trying to free up lending and pressure wealthier Western Europe to pitch in.

The World Bank, European Bank for Reconstruction and Development and the European Investment Bank announced the program to help head off a precipitous slide in the economies of Eastern Europe, which have been hit hard by the global downturn.

World Bank President Robert Zoellick has been campaigning for a large-scale European rescue plan, arguing that banks in the region need $120 billion altogether for recapitalization.

The announcement came just before European Union leaders will meet Sunday to figure out how to aid Eastern Europe. “As someone who was personally involved with the issues of trying to restore Europe to its historical unity 20 years ago, I think it would be a tremendous tragedy if Europe allows itself to be broken in half again,” Mr. Zoellick said in an interview with the German newspaper Sueddeutsche Zeitung earlier this week.

His campaign has rankled EU officials. Joaquin Almunia, the EU’s monetary affairs chief, wrote Mr. Zoellick on Feb. 20 that EU countries already had provided generous funding for banks in Western Europe, which should help their subsidiaries in the east. In many eastern European countries, the bulk of the financial sector is owned by Western Europe banks.

Those relationships have deepened the crisis in Western Europe, as loan losses in the east further undermine struggling banks in the west.

The difficulties faced by Eastern Europe were underscored by a statement by Latvia’s Prime Minister-designate Valdis Dombrovskis, who said on his first day on the job Thursday that the Baltic state could fall short of money by the summer.

Further budget slashing is needed, Mr. Dombrovskis said, adding to the steady stream of negative news from emerging Europe. The head of Romania’s central bank also said Thursday his country will ask the International Monetary Fund and the European Union for loans.

Latvia has already been forced to turn to the International Monetary Fund, the European Union and Nordic governments for a combined €7.5 billion in emergency funding.

“The state is on the verge of bankruptcy,” Mr. Dombrovskis told reporters Thursday, after Latvian President Valdis Zatlers appointed the 37-year-old European Parliament member to form a new governing coalition following the previous government’s collapse last week.

The two-year financing plan announced by the three development banks is aimed at lending for small and medium-sized businesses. The three institutions will provide equity and debt finance, credit lines and political risk insurance.

The World Bank committed to provide €7.5 billion to the banking sector and also increase lending by €12.5 billion euros outside the banking sector in Eastern Europe and central Asia during 2009 and 2010. The EBRD, which focuses on former Soviet bloc countries, said it would provide about €6 billion in equity and debt finance to banks, and may lend directly to businesses. The EIB, the EU’s long-term lending bank, said it would make available about €11 billion in lending facilities aimed at businesses.

Source: wsj.com

Comment