Competitiveness in the Baltics in the Run-Up to EU Accession
IMF Staff Country Reports, April 28, 2003
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- Competitiveness in the Baltics in the Run-Up to EU Accession
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Bibliographic details
- Published: April 28, 2003
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781451805376.002
Executive summary and main findings
- The paper analyzes competitiveness in the Baltics in the run-up to European Union accession.
- Several factors appear to have driven movements in equilibrium real exchange rates in the Baltics since the start of the transition process.
- In the earlier years of transition:
- Price liberalization contributed to real appreciation through higher measured inflation.
- Increased demand for services and other nontradables contributed to real appreciation through higher measured inflation.
- Shifts in domestic production and exports toward higher valued-added products contributed to real appreciation through higher measured inflation.
- The strength of the real appreciation during these years appears to also reflect the correction of an initial undervaluation of exchange rates.
Drivers of real exchange rate movements (identified)
- Price liberalization.
- Increased demand for services and other nontradables.
- Structural shifts in domestic production and exports toward higher value-added products.
- Correction of an initial undervaluation of exchange rates.
Thematic coverage and keywords
- Subject areas: Exchange rates, Foreign exchange, Inflation, Prices, Production, Productivity, Real effective exchange rates, Real exchange rates.
- Keywords: Baltics, CR, current account, EU accession, euro, euro area, exchange rate, exchange rate appreciation, Exchange rates, fiscal policy, Inflation, ISCR, market share, nominal exchange rate, price, Productivity, productivity convergence, productivity differential, productivity growth, productivity improvement, productivity performance, Real effective exchange rates, Real exchange rates.
Content in this bundle
- Competitiveness in the Baltics in the Run-Up to EU Accession - ISCR/03/114