This blog recently highlighted the trouble being faced by Latvia in this economic crisis. We all knew that Latvia was not the only country suffering and not the only Baltic country suffering. But todays news suggests that Lithuania is in even deeper trouble.
This story explains that the Lithuanian economy has falled by a thumping 22.4% in the second quarter. And we all thought that the 17% drop in activity in Latvia was huge!
If this isn’t an alert for the IMF that more funds will soon be required, I don’t know what is.
The real problem is that under such conditions, how do you tell what will help to end this slump? We all know that economic problems in one country can easily spread across the border since neighbouring nations are generally significant trading partners. This is one reason why South Africa has been so loathe to interfere in Zimbabwe for so long - the fear that the economic disaster could be transferred.
With Latvia and Lithuania in such economic retreat, we are left to fear that Poland will be pulled much lower. Let us hope not.