Lithuania Economic Forecast

Lithuania Economic Outlook

February 4, 2020

GDP growth remained healthy in the fourth quarter of last year, according to a preliminary estimate. That said, available data hints that this was largely thanks to one-off inflows while key sectors lost momentum at the end of 2019. Industrial output growth fell to a near six-year low in Q4 amid marked deteriorations across the manufacturing and utilities sectors. On top of that, retail sales growth slumped to a two-year low in Q4, signaling that household consumption lost some traction in the quarter amid weakening consumer confidence and faltering private sector lending. Meanwhile, dynamics in the external arena were similarly muted: Merchandise exports dipped in October–November, after slightly increasing in Q3, weighed on by slowing EU trade and a Brexit-related downturn. In other news, on 31 January, Fitch Ratings upgrade Lithuania’s rating to 'A' from 'A-', with a stable outlook, citing robust growth and healthy public finances.

Lithuania Economic Growth

The economy is seen losing traction this year, as both domestic activity and the external sector face rising headwinds. Slowing wage growth and increasing labor shortages are set to limit private consumption growth, while slowing inflows of EU funds are seen curbing investment activity growth. Meanwhile, feebler demand from the Eurozone bodes ill for the external sector. FocusEconomics analysts see growth at 2.6% in 2020, which is unchanged from last month’s forecast, and at 2.5% in 2021.

Lithuania Economy Data

2014 2015 2016 2017 2018
Population (million)2.92.92.92.82.8
GDP per capita (EUR)12,48312,87413,52914,93816,194
GDP (EUR bn)36.637.438.842.245.1
Economic Growth (GDP, annual variation in %)3.52.02.44.13.5
Consumption (annual variation in %)4.04.05.03.33.9
Investment (annual variation in %)5.84.90.36.86.5
Industrial Production (annual variation in %)0.04.42.96.94.9
Retail Sales (annual variation in %)5.55.36.94.56.5
Unemployment Rate10.18.87.66.76.0
Fiscal Balance (% of GDP)-0.6-0.30.20.50.7
Public Debt (% of GDP)40.542.640.039.434.2
Money (annual variation in %)1.533.17.35.911.4
Inflation Rate (CPI, annual variation in %, eop)-0.3-0.11.73.91.9
Inflation Rate (HICP, annual variation in %)0.2-0.70.73.72.5
Inflation (PPI, annual variation in %)-5.0-9.6-4.45.15.6
Policy Interest Rate (%)0.00.0-  -  -  
Exchange Rate (vs EUR)-  -  -  -  -  
Exchange Rate (vs EUR, aop)1.001.001.001.001.00
Current Account (% of GDP)3.6-2.1-0.70.81.5
Current Account Balance (EUR bn)1.2-0.8-0.30.40.7
Trade Balance (EUR billion)-0.9-2.0-1.8-2.0-2.6
Exports (EUR billion)23.822.321.925.727.5
Imports (EUR billion)24.724.323.727.730.1
Exports (annual variation in %)-1.0-6.1-1.717.36.7
Imports (annual variation in %)-0.9-1.6-2.516.88.7
International Reserves (EUR)7.21.62.53.75.0
External Debt (% of GDP)69.875.885.383.678.5

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Lithuania Facts

Value Change Date
Bond Yield0.430.0 %Dec 30

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