Lithuania Economic Forecast

Lithuania Economic Outlook

June 26, 2018

The economy got off to a healthy start this year according to recently released data, with growth led by sustained strength in the external sector and robust fixed investment growth in the face of a favorable monetary policy environment. Exports rose on an annual basis by double digits in Q1, comfortably outpacing growth in imports despite easing demand from some of Lithuania’s key trading partners, including its Baltic neighbors and Poland. On the domestic front, stronger wage growth and a sustained moderation in inflationary pressures supported household consumption. Meanwhile, available data for the second quarter points to continued growth dynamics; the economic sentiment indicator surged to an over one-decade high in May. Industrial production ticked up in the same month on the manufacturing sector’s strength, whereas private consumption was likely supported by easing inflationary pressures.

Lithuania Economic Growth

Domestic demand is projected to remain robust and drive growth in the short-to-medium term, largely on the back of improving labor market conditions coupled with a favorable investment climate and more effective absorption of EU structural funds. Furthermore, and despite an expected slowdown, the external sector will likely remain sturdy in the short term. The economy is projected to expand 3.3% in 2018, which is unchanged from last month’s forecast. In 2019, FocusEconomics panelists see growth moderating slightly to 2.9%.

Lithuania Economy Data

20132014201520162017
Population (million)3.02.92.92.92.8
GDP per capita (EUR)11,83212,48312,87413,49414,832
GDP (EUR bn)35.036.637.438.741.9
Economic Growth (GDP, annual variation in %)3.53.52.02.33.9
Consumption (annual variation in %)4.34.04.04.93.8
Investment (annual variation in %)8.35.84.8-0.57.3
Industrial Production (annual variation in %)3.20.14.92.86.9
Retail Sales (annual variation in %)4.35.55.36.94.5
Unemployment Rate11.410.18.87.66.7
Fiscal Balance (% of GDP)-2.6-0.6-0.20.30.5
Public Debt (% of GDP)38.840.542.640.139.7
Money (annual variation in %)4.91.533.17.35.9
Inflation Rate (CPI, annual variation in %, eop)0.4-0.3-0.11.73.9
Inflation Rate (HICP, annual variation in %)1.20.2-0.70.73.7
Inflation (PPI, annual variation in %)-2.4-4.9-9.6-4.34.9
Policy Interest Rate (%)0.00.00.00.00.0
Exchange Rate (vs EUR)-  -  -  -  -  
Exchange Rate (vs EUR, aop)-  -  -  -  -  
Current Account (% of GDP)0.83.4-2.9-1.20.8
Current Account Balance (EUR bn)0.31.2-1.0-0.40.3
Trade Balance (EUR billion)-1.7-1.5-2.5-2.1-2.4
Exports (EUR billion)24.524.422.922.626.4
Imports (EUR billion)26.225.925.424.728.8
Exports (annual variation in %)6.5-0.4-6.1-1.316.8
Imports (annual variation in %)5.2-1.1-1.9-2.816.6
International Reserves (EUR)5.97.21.62.53.7
External Debt (% of GDP)70.369.875.885.583.1

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Lithuania Facts

ValueChangeDate
Bond Yield1.150.0 %Jul 13
Stock Market7140.45 %Jul 13

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