Lithuania's economic growth slows down in Q2

Lithuanian gross domestic product (GDP) grew by 2.0 percent compared to the same quarter of last year, announced Statistics Lithuania on Friday.

The seasonally-adjusted real growth rate was lower than in the first quarter, when GDP growth stood at 2.6 percent, according to revised data from Statistics Lithuania.

The Lithuanian economic growth continued to be driven by domestic demand and growth in retail trade, while investments remained weak.

The country's economists remain divided on the future path of Lithuania's economic growth. The second quarter GDP data came below Swedbank's expectations. Yet, Vaiva Seckute, senior economist at the bank, believes the second quarter probably marked a temporary slowdown.

"Labor market and credit growth for business and households remains strong. Moreover, export growth of Lithuanian origin goods, except for mineral fuels, did not slow down in April and May," Seckute wrote in a note.

Swedbank expects Lithuania's economic growth to be "below 3.0 percent" this year.

Meanwhile, Gitanas Nauseda, adviser to the CEO of SEB bank in Lithuania, thinks that the prospect of faster growth for the Lithuanian economy has become questionable.

He expects the global economy to remain "in a state of slumber" citing Brexit, weak investments, and geopolitical uncertainty as the main reasons forcing major central banks to continue expansionary monetary policy.

"There's an impression that the country's economy has given its max throttle, therefore prospects of faster GDP growth in coming years, especially in 2017, doesn't look obvious anymore," said Nauseda in his commentary.

Lithuania's central bank expects the country's economy to grow by 2.6 percent this year. In 2015, Lithuania's GDP grew by 1.6 percent. Endit