Flash comment: Lithuania - October 30, 2017
GDP growth weakens, probably temporary

 In the third quarter of this year GDP was 3.1% higher than a year ago. Seasonally and working day adjusted annual growth was 3.4%, while quarterly growth was a meagre 0.1%. This is markedly slower growth than during the first two quarters of this year, but not a cause for concern.

Slower retail trade growth indicates that household consumption probably weakened in the third quarter – higher inflation, shrinking employment (due to shrinking working age population) and overall number of consumers may have dragged it down.

Investments have been recovering this year, but still slow distribution of EU structural funds could have dented their growth in the third quarter.

Outlook: above trend growth will continue

During the first 9 months of this year GDP increased by 3.8% compared with the same period a year ago. This is exactly in line with our forecast for 2017. In 2018 GDP growth will cool down, mainly due to somewhat weaker household consumption and less export growth, but investments will have higher positive contribution. In 2019 GDP growth will come down to its potential of around 2.5%. ;

For more information about this report, please contact Mr. Nerijus Mačiulis, +370 5 258 2237, nerijus.maciulis@swedbank.lt
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