Analytics, Economics, EU – Baltic States, GDP, Lithuania
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Friday, 29.03.2024, 03:40
Swedbank: Lithuania's economy will shrink 6.5% in 2020
Estonia's economic slump projection was upped from 5 to 7%, and Latvia's rose from 5.8 to 7.5%.
The bank's chief economist Nerijus Maciulis says the forecasts have been updated taking into account the situation in export markets.
"Having taken into account the situation in export markets and a possible slower recovery, we are cutting the Lithuanian GDP's change projection from minus 5 to minus 6.5%, but that should be the lowest drop among the Baltic states," Maciulis said in a statement.
Swedbank economists also estimate that the Baltic states' economies will suffer less than Southern European countries since internal demand is seen already picking up as lockdown restrictions are being gradually lifted.
Maciulis also pays attention to the fact that the Baltic states faced the crisis non-overheated and balanced, having no foreign trade deficits, real estate bubbles, and businesses and residents don’t have excessive financial commitments.
Private consumption in Lithuania is projected to shrink 6%, and the government sector's consumption will increase by 5%. Meanwhile, the formation of general capital (investments) will be equal to zero.
Swedbank economists also upped the unemployment level's projection from 8 to 8.9%. Lithuania's export level is estimated to drop by around a tenth, and a worse scenario cannot be ruled out as well, economists say.
Next year, Lithuania's economy is expected to grow 4.5%, down from the previous estimate of 5%. Estonia's economy is expected to expand by 5% (unchanged), and Latvia's economy should grow 4.3% (5.8%).
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