Lithuania Economic Forecast

Lithuania Economic Outlook

November 21, 2017

Growth moderated in the third quarter but remained robust overall, according to a new flash release. Although details are still outstanding, the notable deceleration in retail sales growth throughout the quarter suggests softer private consumption. Despite robustly rising wages, a spike in inflation and growing unemployment likely weighed on consumer spending. Nevertheless, industrial production continued to expand healthily in Q3, underpinned by strong external demand; higher overseas orders from the EU and CIS countries again boosted exports. On 13 November an IMF mission concluded its visit to Lithuania. The IMF highlighted that the economy is enjoying a fast and broad-based expansion, but also noted that wage growth has outpaced productivity since 2013. This threatens competitiveness going forward and could translate into slower export growth and higher inflation.

Lithuania Economic Growth

The economy is set to record another year of robust expansion in 2018, underpinned by strong inflows of EU funds, solid external demand and healthy household spending. Moreover, robust fiscal parameters provide the government with ample room to maneuver. Nevertheless, a resurgence in regional geopolitical tensions could weigh on exports, and fast wage growth could result in fewer new jobs and drag on private consumption. The FocusEconomics Consensus Forecast panel expects the economy to expand 3.3% in 2018, up 0.1 percentage points from last month’s estimate, and 2.9% the following year.

Lithuania Economy Data

20122013201420152016
Population (million)3.03.02.92.92.9
GDP per capita (EUR)11,14511,83212,48312,84013,445
GDP (EUR bn)33.335.036.637.338.6
Economic Growth (GDP, annual variation in %)3.83.53.51.82.2
Consumption (annual variation in %)3.14.34.34.15.6
Investment (annual variation in %)-1.88.33.74.7-0.5
Industrial Production (annual variation in %)3.63.70.25.02.9
Retail Sales (annual variation in %)3.84.35.75.37.1
Unemployment Rate13.211.410.18.87.6
Fiscal Balance (% of GDP)-3.1-2.6-0.7-0.20.3
Public Debt (% of GDP)39.838.740.542.740.2
Money (annual variation in %)7.24.91.533.17.3
Inflation Rate (CPI, annual variation in %, eop)2.80.4-0.3-0.11.7
Inflation Rate (HICP, annual variation in %)3.21.20.2-0.70.7
Inflation (PPI, annual variation in %)5.0-2.4-4.9-9.6-4.3
Policy Interest Rate (%)0.750.250.050.0-  
Exchange Rate (vs EUR)-  -  -  -  -  
Exchange Rate (vs EUR, aop)-  -  -  -  -  
Current Account (% of GDP)-1.21.53.7-2.4-1.2
Current Account Balance (EUR bn)-0.40.51.3-0.9-0.3
Trade Balance (EUR billion)-1.8-1.7-1.5-2.5-2.1
Exports (EUR billion)23.024.524.422.922.6
Imports (EUR billion)24.926.225.925.424.7
Exports (annual variation in %)13.96.5-0.4-6.1-1.3
Imports (annual variation in %)9.25.2-1.1-1.9-2.8
International Reserves (EUR)2.55.97.21.62.5
External Debt (% of GDP)78.270.369.876.086.4

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Lithuania Facts

ValueChangeDate
Bond Yield0.700.0 %Dec 06
Stock Market6610.45 %Dec 06

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