Lithuania: Economic growth eases in Q2
August 30, 2016
GDP rose 1.9% in annual terms in Q2, according to detailed data released by the National Statistics Office on 30 August. The result was revised up from the 1.8% growth reported in the preliminary estimate. The second quarter expansion represented a deceleration over the 2.4% increase seen in the first quarter and was largely the result of weaker export growth, mainly due to the faltering exports of refined petroleum products, maintenance work at oil refineries and smaller production margins.
Private consumption remained the biggest contribution to growth, as household spending was once again supported by steady increases in wages and a shrinking unemployment rate. Private consumption growth increased from 5.3% in Q1 to 5.6% in Q2, which marked the fastest expansion since September 2013. Growth in government consumption also accelerated, expanding 1.5% in Q2, which was above the 0.9% increase recorded in Q1. Fixed investment disappointed for yet another quarter on the back of postponements in EU-funded investment plans, but the contraction was markedly less severe this time, coming in at minus 0.8% in Q2 (Q1: -6.8% year-on-year).
Exports decelerated notably from a 9.3% increase in Q1 to a 1.5% expansion in Q2. Higher exports of grain were largely offset by lower outflows of refined oil products. Imports also eased and recorded a 1.9% expansion in Q2, which was below the 6.1% expansion reported in Q1. As a result, the net contribution of the external sector to overall growth deteriorated remarkably from plus 2.3 percentage points in the first quarter to minus 0.4 percentage points in the second quarter.
On a quarter-on-quarter basis, GDP grew a seasonally- and working-day adjusted 0.2% in Q2, which marked a deterioration over the 0.9% expansion in Q1 and the lowest reading since March 2013.
Author: David Ampudia, Economist