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Nerijus Maciulis: Lithuania's economy "reaping its fruits"

Danuta Pavilenene, BC, Vilnius, 25.04.2012.Print version
Lithuania managed to avoid a third EU euro area threat and its economy keeps significantly growing, said Nerijus Maciulis, chief economist at the Swedbank.

"Lithuania's economy is reaping its fruits at the moment. The roots in 2009-2010 were bitter, when adjustments had to be made, numbers of employees and expenditures in public sector had to be reduced, however, a present situation shows that majority of euro area states have to take similar or even more drastic measures, while, Lithuania is already able to move forward," the expert said in the presentation of his economic report. However, he admitted that in a long time perspective challenges concerning growth and competitiveness do remain, writes LETA/ELTA.


According to Maciulis, Lithuanian economy could be aptly called the fastest developing in the EU. Only Poland or Estonia could outstripped its growth.


"Tendencies at the beginning of the year prove that Lithuania's economy will grow 3.3% this year. Even though, the growth is slower than the last year – as then it was almost 6%, but it still remains one of the fastest in Europe," the economist said.


He forecasts that this year and in 2013 domestic demand will remain the main source for economic growth.


"It has been forecasted that unemployment rate will decrease by 13% this year and by 11% in 2013. Returning to the natural rate of unemployment which stands at around 6%, still is to be achieved in long time perspective, while, faster decrease in this rate could be stimulated by recovery in construction sector which has cut 91 thousand jobs due to the crisis," the Swedbank analyst said.


Commenting on changes in average wage in Lithuania, Maciulis forecasted it to increase by 4.3%; however, he noted that it will greatly depend on minimum monthly wage which, most probably, will increase in the mid-year. However, one should not expect general increase in wages nor this year, neither in 2013, he said.


Maciulis is certain that Lithuanian consumers will definitely encounter prices of oil and some other raw materials which have been growing rapidly, due to this fact, forecast for this year inflation has been increased up to 2.8%.


"In 2013, external factors influence to prices in Lithuania was less significant; therefore, we reduced inflation forecast for 2013 to 2.5%. The government budget deficit in 2013 will keep going down and will make 2% of GDP, so we forecast that the most likely date for adopting euro in Lithuania is 2015," Maciulis said.

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