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The OECD now expects the Latvian economy to grow by 5.2% this year and 4.2% next year. In its September outlook, the OECD projected Latvia's economic growth at 4.3% in 2017 and 3.7% in 2018.

Latvia's harmonized consumer price index is expected to rise 2.8% this year and 2.9% next year, while unemployment is likely to drop to 8.7% this year and 8.3% next year.

The OECD projects Latvia's economic growth to remain strong and broad-based. "Exports are strengthening as prospects in EU countries and Russia are improving. Stronger exports and EU structural fund transfers are boosting investment," the organization said in its outlook.

At the same time, high wage growth will underpin household consumption although unemployment is projected to fall only gradually due to skill and regional mismatches between workers and jobs.

In Estonia, GDP growth is projected at 4.4% this year and 3.3% in 2018. In its previous forecast issued in June 2017, the OECD forecast Estonia's economic growth at 2.6% this year and 3.1% in 2018. Estonian consumer prices are expected to climb 3.7% this year and 3.3% next year. Estonian unemployment is projected to rise to 6.9% this year and 7.6% in 2018.

Lithuania's GDP is projected to grow 3.6% this year and 3% next year. In June, the OECD expected the Lithuanian economy to grow 3.1% this year and 2.9% next year. Lithuania's inflation rate is expected to reach 3.8% in 2017 and 2.9% in 2018. Unemployment is expected to decline to 7.2% this year and 6.6% next year.

OECD has raised Estonia's economic growth forecast for 2017 to 4.4%, compared with 2.6% the organization forecast in June.

The growth forecast was raised by 0.2 percentage points to 3.3% and in 2019 economic growth should total 3%, the organization said in its fresh economic outlook on Tuesday.

"The OECD forecast coincides with the forecast of the Ministry of Finance. Our economy grows and the state's finances are in order," Minister of Finance Toomas Toniste said in a press release.

According to OECD, private as well as public sector's investments have grown and are supported by payments of European Union funds.

Raising the pension age and continuing with the work ability reform will increase access to labor. Skills shortages have emerged in some sectors and, despite increasing labor market participation, buoyant economic activity will induce further tensions on the labor market. Wages will continue to grow at a high pace, weighing on exporters' price competitiveness and impeding gains in export market shares. Supporting employment of women with children, improving the relevance and the quality of adult education, and facilitating skilled migration could ease labor market bottlenecks, OECD said.

Consumer confidence has improved, auguring for robust household spending. Raising the tax-free income to 500 euros boosts the purchasing power of households.

Fiscal balance is reasonable in the present economic cycle and remains below 1%. Since the economy is reaching its potential, all public spending should focus on measures which would boost possible growth and reduce the risk of overheating.

OECD expects consumer prices in Estonia to grow 3.7% this year, 3.3% next year and 2.8% in 2019. Unemployment rate is forecast to be 6.9% in 2017, 7.6% next year and 7.7% in 2019.

The global economy is forecast to grow 3.6% this year, 3.7% next year and 3.6% in 2019. OECD expects the eurozone's economy to grow respectively 2.4%, 2.1% and 1.9%.