Lithuania: Economy accelerates in the first quarter
May 30, 2011
In the first quarter, GDP grew 6.9% over the same period last year. The result was above the 4.8% expansion recorded in the fourth quarter and matched the figure reported in the 28 April flash estimate. Moreover, the first quarter outturn marks the first full year of positive economic growth after GDP had contracted for six consecutive quarters through to March 2010. The domestic sector was the main driver behind the strong first quarter reading. Private consumption accelerated from a 1.7% increase in the fourth quarter to a 5.5% expansion in the first, while fixed investment skyrocketed 41.0% (Q4: +13.9% year-on-year), mainly due to a favourable base of comparison. The net contribution from the external sector to overall economic growth improved over the previous quarter, as imports slowed more than exports. Exports of goods and services expanded 21.8% year-on-year (Q4: +22.9% yoy), while imports climbed 27.2% (Q4: +31.2% yoy). As a result, the net contribution from the external sector to overall growth improved from minus 6.3 percentage points in the fourth quarter to minus 5.1 percentage points in the first. At the sector level the first quarter expansion was driven by a strong performance in the services sector (Q1: +6.0% yoy; Q4: +2.3% yoy). On the other hand, industry (Q1: +11.2% yoy; Q4: +12.3% yoy) and agriculture (Q1: +3.1% yoy; Q4: +6.7% yoy) slowed compared to the previous quarter. A quarter-on-quarter analysis corroborates the positive annual reading, as the economy expanded a seasonally and calendar adjusted 3.5% over the previous quarter, which almost doubled the 1.8% quarter-on-quarter increase tallied in the fourth quarter.