Analytics, Baltic States – CIS, Economics, GDP, Markets and Companies

According to the bank, the motor of Lithuania's economic growth in 2015 will be domestic demand as consumers seem to be spending more. Export is likely to grow gradually, but is expected to fully recover only in 2016.

Rokas Grajauskas, Baltic Analyst of Danske Bank, says export was the main factor responsible for the slowdown of economy in 2014. Export is likely to insignificantly decline for the first time after 2009. The main reason behind this is the 27% of decrease in oil product sales abroad. If oil product export is excluded, Lithuania's total export should grow by around 6%.

Danske Bank forecasts that Lithuania's GDP growth in 2015 will be the lowest throughout 2013-2016. In 2013 Lithuania's GDP growth was at 3.3%, in 2014 it is expected to slow down to 2.9%, while in 2015 to 2.7%, but in 2016 it should increase to 3.1%.

The bank predicts that geopolitical tensions with Russia will be the determining factor for export and domestic markets of the Baltic States. According to Grajauskas in September-October dairy and meat product export from Lithuania to Belarus jumped up dozens of times. Meanwhile, after Russia imposed an embargo on certain products, their export to other countries has been growing consistently. Although it is often said that from 1 to 3 years are needed to find new markets, but Lithuanian businessmen have once again demonstrated their flexibility. Their products are sold not only in the European Union, but in the United States, Saudi Arabia, Egypt and the South East Asia. Nonetheless, the bank states that Lithuanian economy has not taken the full advantage of such markets as China, the Middle East or the South East Asia.