Lithuania Economic Forecast

Lithuania Economic Outlook

November 20, 2018

Preliminary national accounts data revealed that annual growth slid in the third quarter, expanding at the slowest clip in two years. The slowdown was largely driven by weakness in the agricultural sector after a drought severely hurt crop yields with the harvest estimated to be about a quarter smaller than last year. In addition, manufacturing production decelerated slightly in Q3, largely on the back of weaker output in the food, furniture and chemical sub-sectors. The transport sector, which accounts for over half of Lithuania’s services exports, also lost some momentum in the quarter. This was reflected in weaker services export growth. Nevertheless, external sector metrics remained overall healthy in Q3 as the competitiveness of Lithuanian exporters in other sectors continued to improve. In addition, domestic demand seems to have remained strong in Q3: Retail sales expanded at the fastest pace since Q1 2016, propped up by tight labor market and moderating inflationary pressures.

Lithuania Economic Growth

Although growth is seen losing some traction next year, it should remain healthy, largely thanks to robust domestic demand. Lower unemployment, coupled with a stable inflationary environment and rising wages, should underpin household consumption growth, while EU cohesion fund inflows will keep fixed investment growth elevated. Met the why particular analysts see growth clocking in at 2.9% in 2019, which is down 0.1 percentage points from last month’s forecast. In 2020, our panelists expect GDP growth to decelerate to 2.6%.

Lithuania Economy Data

20132014201520162017
Population (million)3.02.92.92.92.8
GDP per capita (EUR)11,83212,48312,87413,49414,832
GDP (EUR bn)35.036.637.438.741.9
Economic Growth (GDP, annual variation in %)3.53.52.02.33.9
Consumption (annual variation in %)4.34.04.04.93.8
Investment (annual variation in %)8.35.84.8-0.57.3
Industrial Production (annual variation in %)3.20.14.92.86.9
Retail Sales (annual variation in %)4.35.55.36.94.5
Unemployment Rate11.411.18.87.66.7
Fiscal Balance (% of GDP)-2.6-0.6-0.20.30.5
Public Debt (% of GDP)38.811.542.611.139.7
Money (annual variation in %)4.91.533.17.35.9
Inflation Rate (CPI, annual variation in %, eop)0.4-0.3-0.11.73.9
Inflation Rate (HICP, annual variation in %)1.20.2-0.70.73.7
Inflation (PPI, annual variation in %)-2.4-4.9-9.6-4.34.9
Policy Interest Rate (%)0.00.00.00.00.0
Exchange Rate (vs EUR)-  -  -  -  -  
Exchange Rate (vs EUR, aop)-  -  -  -  -  
Current Account (% of GDP)0.83.4-2.9-1.20.8
Current Account Balance (EUR bn)0.31.2-1.0-0.40.3
Trade Balance (EUR billion)-1.7-1.5-2.5-2.1-2.4
Exports (EUR billion)24.524.422.922.626.4
Imports (EUR billion)26.225.925.424.728.8
Exports (annual variation in %)6.5-0.4-6.1-1.316.8
Imports (annual variation in %)5.2-1.1-1.9-2.816.6
International Reserves (EUR)5.97.21.62.53.7
External Debt (% of GDP)70.369.875.885.583.1

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Lithuania Facts

ValueChangeDate
Bond Yield1.200.0 %Dec 11
Stock Market6300.45 %Dec 11

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