Alcohol, Analytics, Baltic Export, Economics, GDP, Interview, Lithuania

International Internet Magazine. Baltic States news & analytics Friday, 29.03.2024, 16:47

Nauseda: Lithuanian economy still standing on one foot – exports

Danuta Pavilenene, BC, Vilnius, 29.03.2011.Print version
As the Finance Ministry of Luthuania predicts a 5.8-% growth of gross domestic product (GDP) and the Government urges preparations for a rapid economic rise, the Lithuanian economy is still standing on one foot – exports, while it is yet too difficult to stand on the other foot, domestic consumption, which was severely injured during the crisis, SEB's financial analyst Gitanas Nauseda said.

Gitanas Nauseda.

"The prime minister earlier said that the crisis was over, well, now there is also a reason to believe that the crisis is really over, but talks about the end of the crisis are one thing while talks about which business and society groups really see the end of that crisis are another thing. The business crisis, exclusively the crisis in the export sector, has not ended today, but in the months of last summer and autumn. It could be said that the domestic business crisis is ending at the moment and we may expect certain growth in turnover at least in the short term. Meanwhile, the crisis of people is hardly over as we are still paying the same heating bills," Nauseda told reporters after the presentation of the SEB bank's macroeconomic trends on Tuesday.

 

According to him, a turning point in the people's consciousness may be expected particularly after the heating season in terms of both their expectations and wages. Although an increase in pay is predicted, which practically coincides with inflation forecasts, but it will not allow feeling a real improvement this year, writes LETA/ELTA.

 

"When we are talking about a 3-% increase in domestic consumption, we have in mind not so much the growth of average wage as the fact that more people will obtain jobs and become employed, thus, capable of consuming because of income they receive. With a gradual improvement in expectations, the residents will show more courage in consuming rather than keeping their money in the form of deposits. In the worst times people tend to postpone the savings for even blacker day, thinking that it may be even worse, and they think so not without reason. But the phenomenon should gradually shrink, which is very good," the economist predicted.

 

The adviser to the bank's president stated that the political circles should be firm to decide on real estate and progressive taxes, which would only add up to the country's investment attractiveness and would be an incentive to competitiveness of the business. Nauseda also noted that the rates and thresholds should be considered in the light of the current economic trends.

 

"I cannot say that the foot which was seriously injured during the crisis, domestic consumption, is standing firmly on the floor. It still hurts, it is still up, and we will hardly be able to talk about the firm standing of the economy. Ideally, we will be able to say that only in the second half of this year or in 2012, which is even more realistic," said Nauseda.

 

In 2011, the unemployment rate in the country is to go down to 15%, inflation and domestic consumption should jump by from 3 to 3.5% and a GDP growth is expected to reach over 5%, the analyst said when presenting the SEB's forecast. Yet an increase in wages is not predicted for this year, especially for the employees of public institutions, though, according to Nauseda, various surprises as to prices and wages may be expected before the upcoming elections to the Seimas.






Search site