Analytics, Economics, Energy, GDP, Lithuania

Gitanas Nauseda.

According to SEB bank's analysts, the decommissioning of the Ignalina nuclear power plant (IAE) and increase in electricity prices, rising costs of fuel and other energy resources will be a kind of a test to check the flexibility of Lithuania's companies. The debt-to-GDP ratio will widen both in 2010 and 2011, but it is expected to stabilize in 2012.

In the opinion of Gitanas Nauseda, adviser to the SEB bank's president, the "relapse" in the results of the foreign trade was natural in January 2010, given the negative impact of the IAE closure on Lithuania's export-import balance of energy resources.

The analyst was not surprised by upward fluctuations in inflation at the beginning of 2010, because consequences of the increased electricity prices were seen in consumption of each statistical Lithuanian. This factor will limit the consumption of other products and services for at least several coming months; later on its significance should decrease gradually.

According to Nauseda, no miracle of recovery in the domestic market should be expected this year as there are no objective reasons for such a phenomenon.

"Even if a person always hear the media reports that the country's GDP to grow by 1 or 2%, because of that he will not run to shops to buy something else," the expert said. In his view, people's consumption behaviour can change only if they feel the real impact of the economic recovery in personal finances.