Lithuania
In Q1 2024, the Lithuanian economy returned to growth mode, increasing by 2.9% in real terms year on year. Household consumption resumed its position as the strongest driver of growth, and further signs of an upswing came in the form of the retail trade data for April 2024. As expected, external demand from Lithuania’s main trading partners continues to stagnate, leading enterprises to deplete their stocks and resulting in a sharp decline in gross capital formation. Despite that, gross fixed capital formation is growing, driven mainly by public investment. In May 2024, consumer price inflation was down to 0.8%, but for the year as a whole it is likely to be somewhat above that level (1.5%) due to wages, which are continuing to rise swiftly. Following a budget deficit of only 0.8% of GDP in 2023, we are likely to see an increase to 2.5% this year, largely on account of the hike in defence spending to 3% of GDP. Although GDP stagnated in 2023, the unemployment rate increased only slightly last year; this year, too, it is likely to rise to only 7.2%. We expect real GDP to grow again by 1.7% in 2024, followed by an upswing of 2.2% in 2025 and 2.6% in 2026.
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FORECAST* |
| Main Economic Indicators | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 |
| Population, 1000 persons | 2801 | 2832 | 2872 | . | . | . |
| GDP, real change in % | 6.3 | 2.4 | -0.3 | 1.7 | 2.2 | 2.6 |
| GDP per capita (EUR at PPP) | 29190 | 31650 | 32560 | . | . | . |
| Gross industrial production, real change in % | 20.5 | 9.1 | -6.4 | . | . | . |
| Unemployment rate - LFS, in %, average | 7.1 | 6.0 | 6.9 | 7.2 | 6.7 | 6.4 |
| Average gross monthly wages, EUR | 1579 | 1789 | 2014 | . | . | . |
| Consumer prices, % p.a. | 4.6 | 18.9 | 8.7 | 1.5 | 2.3 | 2.5 |
| Fiscal balance in % of GDP | -1.2 | -0.6 | -0.8 | -2.5 | -2.5 | -2.3 |
| Public debt in % of GDP | 43.4 | 38.1 | 38.3 | . | . | . |
| Current account in % of GDP | 1.1 | -5.5 | 1.9 | 2.2 | 2.8 | 2.5 |
| FDI inflow, EUR m | 2534 | 634 | 2940 | . | . | . |
| Gross external debt in % of GDP | 78.9 | 67.6 | 68.4 | . | . | . |
Basic data are continuously updated.
* Forecasts are changed beginning of January, April, July and November.
See Press Conferences.
publication_icon
Monthly Report No. 7-8/2024
Vasily Astrov, Alexandra Bykova, Rumen Dobrinsky, Selena Duraković, Meryem Gökten, Richard Grieveson, Doris Hanzl-Weiss, Gabor Hunya, Branimir Jovanović, Niko Korpar, Sebastian Leitner, Isilda Mara, Olga Pindyuk, Sandor Richter, Bernd Christoph Ströhm, Maryna Tverdostup, Zuzana Zavarská and Adam Żurawski
wiiw Monthly Report No. 7-8, July-August 2024
45 pages including 5 Tables and 12 Figures
Details
publication_icon
Executive summary
Olga Pindyuk
in: The Crisis is Over, but its Scarring Effects are Hindering Recovery
wiiw Forecast Report No. Spring 2024, April 2024 , pp. I-VII
Details
In Q1 2024, the Lithuanian economy returned to growth mode, increasing by 2.9% in real terms year on year. Household consumption resumed its position as the strongest driver of growth, and further signs of an upswing came in the form of the retail trade data for April 2024. As expected, external demand from Lithuania’s main trading partners continues to stagnate, leading enterprises to deplete their stocks and resulting in a sharp decline in gross capital formation. Despite that, gross fixed capital formation is growing, driven mainly by public investment. In May 2024, consumer price inflation was down to 0.8%, but for the year as a whole it is likely to be somewhat above that level (1.5%) due to wages, which are continuing to rise swiftly. Following a budget deficit of only 0.8% of GDP in 2023, we are likely to see an increase to 2.5% this year, largely on account of the hike in defence spending to 3% of GDP. Although GDP stagnated in 2023, the unemployment rate increased only slightly last year; this year, too, it is likely to rise to only 7.2%. We expect real GDP to grow again by 1.7% in 2024, followed by an upswing of 2.2% in 2025 and 2.6% in 2026.
