Strong household consumption and recovering investment
to revised GDP figures, the Lithuanian economy grew more rapidly in the fourth
quarter of last year and in 2016 than previously estimated. The annual real GDP
growth accelerated to 3.2% in the fourth quarter of last year (prev. 3%), while
GDP increased by 2.3%
in 2016 (prev. 2.2%).
consumption continued to contribute most to GDP growth. Last yar household consumption demonstrated
the most rapid growth since 2007, as it increased by 5.6%, in real terms. It was supported by continued improvement in the labour market, robust and broad-based wage growth, as well as by an accelerating growth of the household loan portfolio.
the annual real growth of investment accelerated to 5.7% in the fourth quarter
of 2016, it did not manage to drag the investment growth out of the negative territory
for the whole last year. Shrinking inventories contributed negatively to GDP
growth throughout the whole year.
real terms, exports of goods and services increased by 2.9% last year. Exports of
goods were negatively affected by bad harvests and thus shrinking exports of
grain and oil seeds. Meanwhile, exports of services surprised on the upside
last year. The imports of goods and services increased by 2.6% last year.
Outlook: growth will pick up before easing
We expect economic growth to
accelerate to 2.8% this year, before easing to 2.5% in 2018. Even though growth
in exports and investments is expected to pick up this year, household
consumption will remain the main driver of growth. However, growth in household
consumption will ease as real wage bill growth subsides. Investment growth will
strengthen thanks mainly to rising public investments, but also due to faster
distribution of EU funds.
more information about this report, please contact Mrs. Laura Galdikienė, +370 5 258 2275, Laura.Galdikiene@swedbank.lt
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