Lithuania GDP Q4 2020

Lithuania

Lithuania: GDP stumbles back to decline in Q4

March 1, 2021

According to a second estimate released on 1 March, GDP slipped 1.0% year-on-year in the fourth quarter of 2020, contrasting the 0.1% uptick tallied in the third quarter. The reading was revised up from the preliminary estimate of a 1.2% contraction. Meanwhile, in seasonally-adjusted quarter-on-quarter terms, GDP dipped 0.2%, swinging back to contraction after it grew at the sharpest pace on record in the third quarter (Q3: +6.1% s.a. qoq). For 2020 overall, the economy shrank 0.8%, contrasting 2019’s 4.3% expansion.

The fourth quarter’s annual downturn came amid a second round of lockdown measures that came into force in November and December to stem the rapid rise of Covid-19 infections. Private consumption growth slowed to 0.6% annually in Q4 from 1.3% in Q3, while government spending swung to decline, falling at the sharpest rate in three years (Q4: -0.5% yoy; Q3: +0.5% yoy). Meanwhile, fixed investment leaped 9.0% year-on-year in the quarter, rebounding robustly from Q3’s 1.7% dip and cushioning the overall downturn to some extent.

On the external front, exports of goods and services lost momentum in Q4, growing a mild 0.3% on an annual basis (Q3: +0.5% yoy). Moreover, imports contracted for the third consecutive quarter, pointing to subdued demand at home (Q4: -1.2% yoy; Q3: -6.3% yoy).

Moving forward to this year, economic output is seen rebounding after slumping for the first time in over a decade in 2020, as domestic and external demand recover from the Covid-19 hit. Inflows of EU funds should boost investment and provide crucial support for growth. Uncertainty over the pandemic’s course and the speediness of vaccine deployment clouds the outlook, however.

FocusEconomics analysts see the economy rebounding and growing 3.8% in 2021, which is down 0.3 percentage points from last month’s projection. In 2022, the economy is expected to grow 3.3%.


Author:, Economist

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Lithuania GDP Q4  20 20 0

Note: Year-on year changes of GDP in %.
Source: Statistics Lithuania and FocusEconomics Consensus Forecast.


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