Riga - The economies of Estonia, Latvia, and Lithuania are preparing for an economic downturn after booming economic growth.

The only former Soviet republics to join the European Union in 2004, they've sustained robust economic growth in the last three years.

The credit boom that fuelled consumer-driven economic growth is slowing down. However, until the rapid wage hikes slow down, it'll be too difficult to say how painful the slow-down will be, economists say.

Estonia is seeing the beginning of the economic downturn, Lithuania lags about one year behind, and the most imbalanced of the three, the Latvian economy would shrink in 2008, the Danske Bank Baltic analyst Violeta Klyviene told Deutsche Presse-Agentur, dpa Tuesday.

The three small Baltic nations have struggled to control the rising inflation - which remained in the double-digits in March - and shelved their target dates for joining the euro zone.

Consumption plummeted in Estonia, Latvia, and Lithuania, yet the influx of foreign capital - mostly in the form of loans through the Scandinavian-owned banks - has shrunk, which deflated current- accounts deficits.

Estonia posted this week a 10.9 per cent annual inflation in March, down from 11.3 per cent in February, way above the 3-per-cent requirement to join the common European currency.

Boasting the highest inflation in the EU, Latvia's economic indicator nudged to 16.8 per cent in March, up from 16.7 per cent in February, the Central Statistical Bureau said Tuesday. But the inflation is expected to increase in April after a hike of electricity prices next month.

Lithuania's inflation rose to 11.3 per cent in March, up from 10.8 per cent the month earlier. However, the high-price pressure is unlikely to diminish as the Baltic country gears up for the October parliamentary elections and the only nuclear power plant shut-down next year, which is expected to push up the electricity prices.

"In spite of the slowing inflation in Estonia, the wage pressure remains quite strong. If we see the slow down in wages in any of the Baltic countries, then we'll see the slow down in the whole economy," Klyviene told Deutsche Presse-Agentur,