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Saturday, 27.04.2024, 04:07
Depleted exports will halt Lithuania's economic growth in 2018
"As one of the most open economies worldwide, which his dependent
international trade and exports, Lithuania last year benefited greatly, and its
economic growth accelerated to nearly 4%. Unfortunately, we cannot expect the
same speed of economic growth this year. Some signs show that it will shortly
deplete and this is the reason why we slightly lowered the GDP growth
forecasts," Maciulis told a news conference on Wednesday.
After projecting that the gross domestic product (GDP) would grow by 3.5%
for 2018 six months ago, analysts this time lowered the forecast to 3.2%. The
2017 GDP growth forecast remains unchanged, with Lithuania's economy expected
to grow 3.8%. The 2019 forecast remains at 2.5%.
According to preliminary data, Lithuania's exports went up by 12% last
year, however, analysts of the bank believe the growth should slow down to 5%.
"We think that this year the exports will decelerate, as the
competitiveness of costs is declining in Lithuania, while labor costs are
growing faster than productivity. This causes an increase of the labor costs,
and competing at a low price is more difficult for Lithuania. Furthermore, the
euro became considerably more expensive against the US dollar and other
currencies, therefore, more expensive currency makes it more difficult to
export to the US, the Nordic countries and other states," said Maciulis.
The bank's analysts expect this year's inflation to widen by 3.3%, with the
increase of prices slowing down to 2.5% in 2019 – both forecasts remain
unchanged. Swedbank believes the unemployment levels this year and in 2019 to
stand at 6.9%, with the average gross salary climbing by 7% and 6%,
respectively.
In 2018-2019, Lithuania's exports should widen by 5% and 3%, respectively,
while imports should grow by 6.5% and 4%.