Baltic countries

What Can the Baltic States Learn from the Economic Crisis and Recovery?

By Vytautas Kuokštisis, postdoctoral fellow at Vilnius University | 1 June 2015

The Baltic countries were one of the worst hit countries during the Great Recession. Despite numerous predictions about the likely failure of their anti-crisis policy – internal devaluation – the Baltic States have managed to preserve currency pegs, restore fiscal sustainability and return to economic growth. Nevertheless, this fast adjustment should not be taken for granted in the future. The crisis experience speaks to the importance of fiscal policy, trust in government, and safeguarding against excessive indebtedness.