Off the wire
• 46 arrests over irregularities during Morocco's elections  • China willing to deepen anti-corruption cooperation with France: CPC official  • Hamas condemns U.S. for blacklisting its members as int'l terrorists  • 15 police killed by PKK attacks in eastern Turkey  • 1st LD-Writethru: Forty-one U.S. senators to back Iran nuclear deal, enough to block disapproval resolution in Congress  • Spain's housing prices increase by 4 pct in 2Q  • New biogas production project inaugurated in France  • Sudan announces new partnership with China in oil, gas fields  • Three investors in eastern Slovakia to expand production: minister  • Roundup: Turkey shelters 1.9 million Syrian refugees  
You are here: 　 Home

Roundup: Lithuania's central bank lowers GDP forecast for 2015 to 1.6 pct

Xinhua, September 9, 2015 Adjust font size:

The Bank of Lithuania has lowered on Tuesday the country's gross domestic product (GDP) growth forecast for 2015 from 2 percent to 1.6 percent and increased deflation projections.

A 2 percent growth was projected for 2015 in June. The bank's economists now cut the forecast, citing "the newest trends in the domestic and foreign markets."

Growing consumption is being helped by decreasing unemployment. Lithuania's central bank has decreased unemployment projections from 10 percent to 9.6 percent in 2015.

While Lithuania's economy continues to be driven by domestic demand, exports are struggling.

"Although the volume of export to Russia is practically no longer dropping, its volume to other markets is barely increasing," noted the bank in a press release.

Bank of Lithuania has also slashed forecast for the next year, expecting the country's economy to expand by 3.2 percent, down from 3.4 percent in earlier projection.

Inflation projections have been changed to the downside as well, from minus 0.3 percent to minus 0.5 percent, due to decreasing oil and food commodity prices.

"Therefore, the general consumer price level this year continues to decrease, even despite the fact, that due to increasing wages, the prices of some services increased as well," Gediminas Simkus, director of the Economic and Financial Stability Service of the Bank of Lithuania, said.

Inflation projections for the next year have been decreased from 1.6 percent to 1.5 percent.

However, economists from commercial banks in Lithuania have a brighter view on the country's economy. Analysts from DNB bank in Lithuania on Tuesday forecast the country's GDP to grow by 2 percent in 2015 and by 3 percent next year.

Jekaterina Rojaka, DNB's chief economist for Baltic countries, noted that in the first half Lithuania's economy has experienced the biggest challenges since 2009 with exporters taking the most severe shock. Though Rojaka saw the signs of the faster recovery in the second half.

"Business expectations have been gradually improving, a rapid expansion of retail trade illustrates unabated consumer appetite," explained Rojaka in a press release from Lithuania's third largest bank.

"Decreasing unemployment, steadily rising wages and improving consumer expectations are among other good news," she added.

DNB expected a decrease of unemployment to 9 percent and deflation deepening to 0.5 percent in 2015.

Lithuanian economy grew by 2.9 percent in 2014. According to Statistics Lithuania, annual deflation reached 1.2 percent in August. Unemployment level increased to 9.6 percent in July, compared to 9.5 percent in the previous month. Endit