Lithuania: GDP growth hits over 13-year high amid low base effect
August 31, 2021
According to a second estimate released on 31 August, GDP rose 7.8% year-on-year in the second quarter of 2021, quickening from the 1.5% increase tallied in Q1 2021. The reading was revised up from the preliminary estimate of a 6.9% expansion and marked an over 13-year high growth rate. That said, a low base effect propped up the year-on-year reading, as evidenced by a slowdown in GDP growth in quarter-on-quarter terms (Q2: +0.4% s.a. qoq; Q1: +2.2% s.a. qoq).
The second quarter’s annual improvement came amid looser restrictions throughout the quarter and a swifter vaccination campaign. The reading was driven by a marked acceleration in private spending, which grew 13.6% annually in Q2, following Q1’s 0.6% rise. Moreover, government spending rebounded, after contracting at the sharpest rate in over three years in the previous quarter (Q2: +0.5% yoy; Q1: -0.9% yoy), while fixed investment growth quickened to 22.6% year-on-year in the quarter, gaining traction from Q1’s 6.3% increase.
On the external front, growth in exports of goods and services gained considerable momentum in Q2, clocking 25.4% on an annual basis (Q1: +5.0% yoy). Likewise, imports growth rose to 31.5% annually, following a mild 2.5% uptick in the previous quarter. Although both results marked the fastest growth rates on record, they were similarly bolstered by a favorable base effect.