Analytics, Economics, Financial Services, GDP, Investments

However, Fitch research specialists pointed out that Baltic States' position is highly volatile due to open economies, high loan/deposit ratios and external debt.

Fitch noted that the three states managed to level out their economies, improve competitiveness and return to strong growth, which shows their "impressive resilience to the recession in the eurozone".

Fitch believes Latvia will join the euro area in 2014, and Lithuania – in 2015.

The rating agency noted that joining the euro zone would bring a net benefit to "small, open, flexible and largely euroized economies (which are already pegged to the euro) despite the cost of funding potential future eurozone bailouts".

According to Fitch, openness of the Baltic States on trade, labor and capital flows renders them structurally exposed to global shocks.

As reported, the gross domestic product (GDP) of Estonia increased by 3.7% in the fourth quarter of 2012 compared to the same quarter of the previous year.

The annual GDP growth was 3.2% in 2012 compared to the previous year.

Latvia displayed the fastest year-on-year economic growth in the European Union in the fourth quarter of 2012, according to Eurostat data. Latvia's GDP increased 5.7% in the fourth quarter as compared to the fourth quarter of 2011, which was the highest increase across the EU.

On quarterly basis, Latvia's GDP increased 1.3% in the fourth quarter. Lithuania's GDP increased by 1%, while Estonia's quarterly growth was 0.9%. Last year, Lithuania's GDP growth stood at 3.6%.