Lithuania's economic growth is set to slow down considerably next year compared with this year, the central bank said on Wednesday, raising its GDP growth forecast for 2019 but keeping the 2020 projection unchanged.
© DELFI / Josvydas Elinskas

The Bank of Lithuania revised the 2019 GDP growth projection upward to 3.7 percent, from 3.2 percent in June, but expects economic growth to decelerate to 2.5 percent in 2020, unchanged from the previous estimate.

"The worsening international environment has so far left Lithuania's economy unscathed, with its growth rates exceeding expectations," the central bank said in a press release.

"Nonetheless, global headwinds might soon start to bite. Compared to 2019, real GDP growth is projected to moderate considerably in 2020," it added.

Gediminas Simkus, director of the central bank's Economics and Financial Stability Service, says that there is a lack of optimism both among economic experts and in the financial markets and that sentiment is worsening across the planet.

"While global headwinds are intensifying, Lithuanian’s confidence indicators are still high and its first-half economic growth was impressive," Simkus said on Wednesday as he presented the central bank's latest economic review report and projections.

"We can't say that Lithuania's resilience to what is happening in the world is absolute," he added.

The central bank predicts that wage growth in Lithuania will moderate to 6.7 percent next year, from a projected 8.5 percent this year.

Inflation has remained broadly unchanged compared with last year, at just over 2 percent, and is expected to stay at this level in the coming years, with the EU-harmonized average monthly inflation rate projected at 2.3 percent in 2019 and at 2.2 percent in 2020.

Lithuania's export growth is forecast to moderate to 4.6 percent this year, from 5 percent in 2018, and slow further to 3.5 percent next year.

Investment growth is expected to edge up to 6.9 percent in 2019, from 6.7 percent last year, before decelerating to 4.1 percent in 2020.

BNS
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