Flash comment: Lithuania - July 30, 2020
GDP drops only 3.8% in Q2

It seems as if someone forgot to inform Lithuanian economy that economic crisis of a century is ravaging the global economy. Lithuanian Real GDP dropped barely 3.8% in annual terms, beating all estimates by a wide margin.

It was evident from the high frequency indicators that economy was relatively resilient, and that recovery started early but actual outcome had beaten expectations.

Both retail and Swedbank card data showed that consumption across sectors was on a path to recovery, many sectors reached 2019 levels by June already.

Manufacturing also surprised positively in June. Excluding oil, it grew by 5.9% annually indicating a faster than expected recovery in foreign demand.

Net export likely contributed significantly to good performance in the second quarter. Results from April-May show a far faster drop in imports than exports. Although this trend might not continue. Imports will strengthen as domestic demand remains strong. It is rather unlikely than export could become the main engine of recovery going forward given the difficult global trade situation.

 

For more information please contact

Vytenis Šimkus Vytenis.simkus@swedbank.lt +370 687 17870

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