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Roundup: Lithuania records steepest quarterly GDP decline in EU

Xinhua, June 10, 2015 Adjust font size:

Lithuanian economy contracted the most among EU member states in the first quarter of 2015, compared with the previous quarter, data from Eurostat, the EU's statistics office, showed on Tuesday.

Lithuania's GDP, seasonally adjusted, decreased 0.6 percent during the first quarter of 2015, compared with the previous quarter.

Lithuania, together with Estonia, Greece and Finland, were among four out of 28 EU's member states where an economic setback was recorded.

"It is a serious signal," Nerijus Maciulis, chief economist at Swedbank Lithuania, was quoted as saying by local website vz.lt.

"It is not due only to decreased exports to the CIS (Commonwealth of Independent States) markets, but also domestic demand had some negative impact on GDP growth," he added.

Vilija Tauraite, economist at SEB bank in Vilnius, expects the country's economy to accelerate in the second half of the year.

"We have been among the fastest growing in the EU so far, now we see somewhat slowdown," she suggested.

One more quarterly GDP decrease would mean formal recession in Lithuania. However, Maciulis believes this will not happen.

According to him, the introduction of the euro was one of the negative factors in consumer spending in the first quarter, though April's domestic trade data point to a more positive trend.

Lithuania joined the euro zone in January this year.

Compared with the same quarter in 2014, Lithuanian GDP grew 1.5 percent in the first quarter this year. It was the slowest advance in the last 5 years. However, economic analysts anticipated at that time it was a sign of a transitional slowdown and expected the Baltic country's economy to gain momentum later this year.

Decrease of exports, especially to Russia and CIS countries, are being cited by analysts as the most important factors negatively influencing Lithuania's economy. Lithuania's exports fell by 4.6 percent in the first four months of this year from a year earlier to 7.074 billion euros (7.9 billion U.S. dollars), Statistics Lithuania said in a separate statement on Tuesday.

Russia remained Lithuania's key export partner in the four months with 13.7 percent of the total exports, Latvia and Poland in second and third place with 10 percent and 9.7 percent of total exports respectively.

Swedbank expects Lithuania's GDP to expand by 2.3 percent this year, while the country's Ministry of Finance expects the economy to expand by 2.5 percent.

Seasonally adjusted GDP rose by 0.4 percent in both the euro zone and the EU in the first three months of 2015, to compare with previous quarter, Eurostat announced. Endit