Off the wire
• U.S. stocks slump on disappointing GDP data  • Saudi Arabia reports 2 new MERS cases  • Roundup: Death toll rises to 33 in Egypt's Sinai attacks  • UNHCR urges more efforts to tackle Greece's asylum challenges  • Roundup: U.S. economy slows to 2.6 percent in Q4 despite strong personal spending  • Latvia's GDP growth in Q4 hit 1.9 pct y-on-y  • Greek gov't rejects cooperation with troika, new bailout extension  • EU decries discrimination against Somalia's minority women  • Romney says not to run for 2016 presidential election  • Kenya to hold UN Water Meeting  
You are here: 　 Home

ROUNDUP: Lithuania's GDP grows by nearly 3 pct in 2014, to face challenges in 2015

Xinhua, January 31, 2015 Adjust font size:

Lithuania's gross domestic product (GDP) grew by 2.9 percent in 2014 compared with a 3.3 percent advance in 2013, the Baltic country's statistics office said on Friday.

In the fourth quarter, compared with the previous year, the economy expanded by 2.4 percent, when accounting for seasonally and workday adjustments, Statistics Lithuania said in its first estimate of GDP accounts. The last quarter's indicator was the slowest since the second quarter in 2012, statistics showed.

In 2014, the country's GDP amounted to 36.2 billion euros (about 40.9 billion U.S. dollars) at current prices.

The pace of last year's GDP growth was consistent with most Lithuanian commercial banks' expectations. Nevertheless, economists point to the deteriorating Russian market and predict 2015 to be a more challenging year for Lithuania in terms of economic momentum.

Household consumption remained the main engine behind annual GDP growth last year, while exports have been at a crossroads searching for new markets instead of the more familiar Russian market, however feeble, experts agree.

"Growth was most likely driven by household consumption as annual retail trade growth accelerated from 5.0 percent in the third quarter to 6.1 percent in the fourth quarter last year," Vaiva Seckute, senior economist at Swedbank in Vilnius, was quoted as saying in a statement.

However, a few of Lithuania's export sectors, especially transport and food, are still dependent on the Russian market and experience losses due to the Russian food embargo and a continued drop in vehicle exports to Russia, which has a negative effect on the whole economy, she noted.

Swedbank recently revised Lithuania's GDP growth forecast, lowering it to 2.3 percent in 2015, but expects growth to accelerate to 3.5 percent in 2016.

Gitanas Nauseda, financial analyst and advisor to SEB bank's president, suggested the newest GDP data allowed for some room to step away from the most pessimistic scenarios based on Russia's market difficulties.

Nauseda said Lithuania should pay more attention to the euro exchange rate which has been going downhill against the dollar very rapidly.

"This changes the situation of exports and imports in the eurozone, which now includes Lithuania," the economist said.

SEB expected Lithuanian GDP to grow 2.6 this year.

Low oil prices and resulting decreased fuel expenses contributed to private consumption in the country, Danske Bank economist Rokas Grajauskas noted in an emailed statement. According to him, this helped mitigate the negative effects of Russia's retaliating measures against the EU.

Danske Bank forecast Lithuanian GDP growth to stand at 2.7 percent in 2015.

"Obviously, despite of geopolitical challenges, the Lithuanian economy remained among the fastest growing in the EU, standing just behind Ireland, Malta, Hungary and Poland," said Indre Genyte-Pikciene, chief analyst at DNB Bank in Vilnius.

According to her, slowing momentum during the second half of 2014 indicated the weaknesses of a few Lithuanian economy sectors and called for a search for new export markets for Lithuanian producers.

Danske Bank's GDP forecast for 2015 stands at 2.6 percent. Endit