aA
Lithuania's Finance Ministry is not changing its outlook and continues to estimate that the country's economy will slow next year, although it still will exceed the EU average.
UNIQA mineralinio vandens gamyklos atidarymas
UNIQA mineralinio vandens gamyklos atidarymas
© DELFI / Rafael Achmedov

"Fast economic growth will not last forever as the international environment is worsening and international organizations are cutting their estimates. (…) Those risks will undoubtedly affect the Lithuanian economy. (…) Our economy will grow next year as growth will be supported by internal consumption but growth will slow and be more fragile. So, we all need to be cautious," Finance Minister Vilius Sapoka said when presenting the latest macroeconomic forecasts on Wednesday.

The ministry raised the GDP estimate for this year to 3.7 percent, from 2.6 percent in March, bur growth will slow in the future.

The spring GDP growth estimate of 2.4 percent was left unchanged, just as the ones for 2021 and 2022 when the growth of 2.3 percent is expected.

Experts from the ministry cited positive factors, like good migration tendencies, faster growth in direct foreign investment, strong internal and external demand and incentives from the European Central Bank.

Meanwhile, Brexit, growing signs of protectionism, monetary policy changes, geopolitical tensions and fluctuations in global financial markets were named among negative factors.

Vice Minister of Finance Migle Tuskiene said the Brexit process and growing investments were behind the significant change in the GDP estimate for this year from the spring one.

"When evaluating and updating estimates, we took into account both factual results and risks. First of all, what we had in March was that we included in the calculation the assumption that Brexit would take place in late March as we had a very clear date. (…) Factual results also affect our forecasts. Investments are growing faster," she said.

In her words, the inflation forecasts were updated only slightly.

"Over the whole estimated period, we do not expect any major changes in price growth as inflation will stand around 2 percent," the vice minister said.

Lithuania's average annual inflation rate, as measured by the EU Harmonized Index of Consumer Prices (HICP), is forecast to stand at 2.4 percent this year, up by 0.2 percentage points from the March forecast, and the 2020 forecast was increased by 0.1 percentage points to 2.3 percent.

The Finance Ministry forecasts that the change in the average monthly salary before tax will stand at 8.3 percent this year, up 0.3 percentage points from the spring estimate, and the 2020 forecast was increased by 1 percentage point to 7.4 percent.

BNS
It is prohibited to copy and republish the text of this publication without a written permission from UAB „BNS“.
|Populiariausi straipsniai ir video

Researchers are developing new material for planes and cars that will show damage invisible to a human eye

KTU researchers together with colleagues from Latvia, Denmark, Sweden, Slovakia, Ukraine, Czechia,...

Minister: Rail Baltica's joint management model poses threat to its continuity (1)

The joint management model of the European standard-gauge railway project Rail Baltica is already...

Šapoka: new taxes wouldn't be painful (4)

As Lithuania's public debt is growing due to the coronavirus crisis , the country might need to...

Central bank: we are working with Denmark on Danske Bank

As new information on the transfer of money of dubious origin via Danske Bank 's divisions in the...

Thermo Fisher Scientific: no coronavirus vaccine production in Vilnius

Biotechnology company Thermo Fisher Scientific says its Vilnius branch is not producing coronavirus...

Top news

Šapoka: new taxes wouldn't be painful (4)

As Lithuania's public debt is growing due to the coronavirus crisis , the country might need to...

President and PM tested for coronavirus (1)

Lithuanian President Gitanas Nauseda and Prime Minister Saulius Skvernelis have tested negative for...

Righteous Among the Nations honored in Kaunas for saving Jews

Lithuanian families who hid Jews during the Nazi occupation were honored as Righteous Among the...

Conquering hill forts in Kaunas and around

The ancient artefacts are popular sightseeing spots as they usually reveal stunning panoramas. So, put...

Lara Seligman | D+ nariams

In West Africa, U.S. military struggles for scarce resources as terrorism threat grows

Tensions with Iran almost scuttled a major international training exercise in the Sahel.

|Maža didelių žinių kaina