Off the wire
• British FTSE 100 closes lower on Wednesday  • Public transport in Albania stages strike seeking ticket price increase  • Lower oil price not to stimulate world economic growth: Moody's  • Thousands Yemenis rally against Houthi takeover of power  • Greeks gather in pro-gov't rallies during Eurogroup meeting  • Israel intercepts Gaza-bound shipment of materials for weapons making  • Spanish stock market falls 1.29 pct, closes at 10,364 points  • Spain's new businesses increase by 0.8 pct in 2014  • 2nd Ld Writethru: 2 troopers killed in Indian military helicopter crash in Indian-controlled Kashmir  • Interview: Finnish President says "lucky" to trade with China  
You are here: 　 Home

Danske Bank cuts Lithuania's GDP growth forecast in 2015 to 2.5 pct

Xinhua, February 12, 2015 Adjust font size:

Danske Bank, one of the biggest banks in Scandinavia, revised its gross domestic product (GDP) growth forecast for Lithuania down to 2.5 percent in 2015 on Wednesday, mostly due to negative impact from deteriorating trade relations with Russia.

The bank expected previously the country's economy to expand by 2.7 percent this year. Lithuanian GDP growth projection for 2016 remained unchanged at 3.1 percent.

"There is no good news in terms of exports to Russia this year. Lithuanian exports to Russia are expected to decrease by 25 percent in 2015," Rokas Grajauskas, Danske Bank analyst for the Baltic states, was quoted as saying in a statement.

According to him, recession in Russia in 2015 will contribute to significant slow down on imports into the country. It is expected that Russian imports will shrink by 30 percent this year, Grajauskas said.

Last year, Russia remained the top single destination market for Lithuanian exports. Despite Russia's sanctions on food imports from Lithuania and other EU countries, Lithuanian exports to Russian market increased by 4 percent in 2014 and amounted to 6.2 billion euro (about 7.0 billion U.S. dollars), which makes 21 percent share of total exports.

"The fall of imports will have an unavoidable impact on Lithuania and other countries, dependent on Russian markets," the analyst added.

Nevertheless, about 88 percent of Lithuanian exports to Russia are re-exported goods which have lesser impact on the whole economy than exports of Lithuanian origin goods, Grajauskas noted.

Regardless of losses in the Russian market, Danske Bank expects Lithuanian overall exports to increase by 1 percent in 2015. Revenues from exports will grow due to recovering euro zone and new markets to which Lithuanian businesses redirect their exports, including the United States, Saudi Arabia and the countries of South East Asia, the bank said. (1 euro = 1.13 U.S. dollars) Endit