Lithuania’s economic growth will slow down in the near future, but the country will avoid a recession, Prime Minister Ingrida Simonyte has said.
“Considering what I see, what is being projected by those who have already published forecasts, we don’t see a negative territory so far,” she said. “However, the pace of economic growth will be obviously slower, which will have such consequences as slower wage growth and, of course, slower inflation.”
According to the prime minister, the Finance Ministry should update and publish its latest macroeconomic projections this week.
The Finance Ministry has said that the updated forecasts will be used to draft the 2023 budget, which should earmark more than 1 billion euros for compensating households and businesses for increased energy costs.
According to Simonyte, the government intends to submit the 2023 budget bill to the Seimas early in October, i.e. earlier than usual.
According to the latest data from Statistics Lithuania, the country’s real gross domestic product (GDP) contracted by 0.5% in the second quarter versus the first quarter, but rose by 2.6% YoY.
SEB Bank revised its forecast for Lithuania’s GDP growth in 2022 to 1.5% in late August, up from 0.9% in May. Meanwhile, Swedbank upgraded its forecast for Lithuania’s GDP growth this year to 2%, but cut its 2023 growth forecast to 0%. (LRT/Business World Magazine)
