Lithuania: Growth picks up in Q4 2018
According to detailed national accounts data released by the Statistical Institute on 1 March, the Lithuanian economy gained momentum at the end of 2018. GDP expanded 3.7% annually in Q4, up from 2.6% in Q3 but below the preliminary estimate that projected Q4 growth at 3.9%. That said, the fourth-quarter acceleration was driven by a significant contribution from inventories, while fundamentals softened somewhat from the previous quarter.
Growth dynamics in the domestic economy were more lackluster in the final quarter. Private consumption grew 3.7% year-on-year in Q4, easing slightly from the previous quarter’s 4.2% increase, amid a marginal uptick in unemployment and stronger inflationary pressures. In a similar fashion, government spending growth moderated from 1.4% in Q3 to 0.5% in Q4. Furthermore, fixed investment growth decelerated to a year-and-a-half low in the fourth quarter (Q4: +3.6% year-on-year; Q3: +7.0% year-on-year). However, inventories surged in Q4, propping up strong investment activity growth and driving the overall economic expansion in the final quarter.
On the external front, metrics were similarly downbeat. Exports growth slowed to a two-year low in the fourth quarter amid feebler external demand (Q4: +5.8% yoy; Q3: +3.1% yoy). In contrast, imports accelerated at the end of 2018 (Q4: +4.3% yoy; Q3: +3.6% yoy) amid still-strong consumer demand, highlighting a deterioration with the external sector.
On a quarter-on-quarter basis, growth surged to 1.3% in seasonally-adjusted terms in the fourth quarter (previously reported: +1.5% quarter-on-quarter). The result marked the fastest rise in two years and was a significant improvement from the previous quarter’s 0.4% increase. Meanwhile, full year growth came in at 3.4% (previously reported: 3.5% yoy), moderating from the 4.1% expansion logged in 2017.