Lithuania

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The Lithuanian economy grew by 4.6% year on year in Q1, above expectations. Moreover, after a slump in March, business sentiment improved again slightly in the subsequent months of 2022. External demand has remained robust in the most recent months, and manufacturing also recorded good growth rates. However, rising prices, particularly of imported energy and food, will reduce the purchasing power of households substantially. In Q2 2022 Lithuania’s decision to stop importing Russian gas and oil resulted in the second-highest inflation rate in the EU (after Estonia). As a result we expect private consumption to decline in real terms in the second half of this year. At the same time the situation on the labour market is getting tighter – the unemployment rate declined again to 6% in April 2022, and gross wages still grew by 14% year on year in Q1 2022. Given the higher-than-expected growth in household consumption and exports in Q1, we have raised our GDP growth forecast for 2022 slightly, from 1.7% to 1.9%. In 2023 investment will be driven by increased public spending, leading us to expect a more substantial upswing in GDP growth to 2.8%. Anti-inflationary measures (compensation to households for rising gas and electricity bills, additional pension increases etc.) will cause the public budget deficit to widen to 4.5% in 2022.
        FORECAST*
Main Economic Indicators201920202021202220232024
Population, 1000 persons279427952801...
GDP, real change in %4.6-0.15.01.92.82.6
GDP per capita (EUR at PPP)262202598028490...
Gross industrial production, real change in %3.0-1.319.5...
Unemployment rate - LFS, in %, average6.38.57.16.87.06.0
Average gross monthly wages, EUR129614291568...
Consumer prices, % p.a.2.21.14.614.56.54.0
Fiscal balance in % of GDP0.5-7.3-1.0-4.5-3.5-2.0
Public debt in % of GDP35.946.644.3...
Current account in % of GDP3.57.31.40.40.40.5
FDI inflow, EUR m306039791605...
Gross external debt in % of GDP70.175.776.6...


Basic data are continuously updated.

* Forecasts are changed beginning of January, April, July and November.
See Press Conferences.

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Monthly Report No. 7-8/2022

Vasily Astrov, Alexandra Bykova, Rumen Dobrinsky, Selena Duraković, Richard Grieveson, Doris Hanzl-Weiss, Gabor Hunya, Branimir Jovanović, Niko Korpar, Sebastian Leitner, Isilda Mara, Bernhard Moshammer, Olga Pindyuk, Sandor Richter, Bernd Christoph Ströhm, Maryna Tverdostup, Nina Vujanović, Zuzana Zavarská and Adam Żurawski
wiiw Monthly Report No. 7-8, July-August 2022
58 pages including 4 Tables and 21 Figures

Details

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Executive summary

Vasily Astrov
in: Overshadowed by War and Sanctions
wiiw Forecast Report No. Spring 2022, April 2022 , pp. I-VII
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