Robust economic growth did not lose pace in Q1
Even though Lithuania is an open economy,
greatly dependent on imports and exports, country’s growth pace shows it is still
reluctant to the global challenges, such as US-China trade war and German
slowdown. GDP figures show that Lithuanian economy sustained the growth
momentum and in annual terms increased by 4% in the first quarter of this year.
In quarterly terms, the economy grew by 1%.
Growth was mainly influenced by the increase of
gross fixed capital formation, exports and household consumption, that grew by
8.4%, 4.4% and 4% respectively when compared to 2018.
Value added growth was still broad-based with construction
sector being the best performer – annual growth in value added has accelerated
to 13.4%. It was also supported by 5.5% growth in trade, transport,
accommodation and ICT that enjoyed 5% increase. Other sectors have also
contributed to the growth with none having a negative annual value-added
confidence reached all-time highs, suggesting that consumption growth will
continue its growth path. Domestic retail trade (excluding motor vehicles),
stimulated by robust wage growth, healthy labour market and easing inflationary
pressures has expanded by 8.7%.
Outlook: domestic growth to slow down slightly
We expect growth to moderate to 3% throughout
the year and slow down to 2% in 2020. In May industrial confidence indicators
declined by 2 percentage points, mainly due to weaker demand expectations and
build-up of inventories. Wage growth, together with consumer confidence, are
expected to remain strong. Due to base
effects, capacity constraints and very tight labour market exports are expected
to slow down. German economic slowdown and looming trade war threats also add
to the uncertainty and may negatively affect export growth.
For more information about this report, please contact:
Greta Ilekytė, +370 5258 22 75, firstname.lastname@example.org.
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