Flash comment: Lithuania - January 30, 2018
Solid GDP growth to mark the end of a year
Economy has gained pace after a slump 3rd quarter. GDP grew 3.6% year-on-year and 1.5% quarter-on-quarter (Seasonally and working-day adjusted) in Q4. Strong run at the end of the year solidified a 3.8% GDP growth for 2017 - exactly in line with our forecast.

Strong performance in the last quarter was mainly supported by rapid export expansion together with recovering investments. Public investments started to pick up pace after prolonged period of stagnation. It could be that capacity constraints and strong demand finally convinced firms to invest. In addition retail grew at a solid pace of 4.3% in December despite previous weaker performance.

Outlook: above trend growth will continue

Outlook for 2018 remains optimistic albeit more conservative compared to 2017. We expect the economy to expand 3.2% this year. It will be difficult to repeat the surge in exports we observed last year - labour shortages and limited capacity will put a lid on growth. Nevertheless strong household consumption and recovery in investments should compensate for it somewhat.

For more information about this report, please contact Mr. Vytenis Šimkus, +370 5 258 5163, vytenis.simkus@swedbank.lt

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