Analytics, Banks, Economics, Financial Services, GDP, Lithuania

This is an upward revision from the bank's projections of 2.7% and 2%, respectively, released in late 2018. 

Indre Genyte-Pikciene, the bank's chief analyst, said exports, a key driver of Lithuania's economic growth in 2017 and 2018, will be one of its weakest links this year and next year. 

"Our exports are a very important component of economic growth (...), which provided a very large boost to the Lithuanian economy in 2017 and 2018. In a global, long-term perspective, this is very important," the analyst said at a news conference.   

"Annual exports somewhat lost momentum in the second half (of 2018) and its rate of growth was not the same as in 2017 or the first half of 2018," she added. 

In their spring forecast, Luminor's analysts revised down their average annual inflation and unemployment projections for this year and next year. 

The bank now predicts that Lithuania's average annual inflation will reach 2% in 2019 and will accelerate somewhat to 2.3% in 2020, compared with its previous estimates of 2.7% and 2.2%, respectively.

The gross wage growth is projected to be 8% this year and slow down to 6% next year. The respective net wage growth projections are 9% and 5%.  

Luminor lowered its unemployment rate forecasts by 0.2 percentage points to 5.8% for 2019 and by 0.4 points to 5.6% for 2020.