2012-05-10
After a faster than expected economic growth in the first quarter of this year, the Bank of Lithuania revised upwards the economic growth forecasts for this year and the next year. According to them, the gross domestic product of the country will grow by 3.0 per cent in 2012 and 3.5 per cent in 2013 or by respectively 0.8 and 0.2 percentage point more than forecasted in the beginning of the year.
“The quarter of this year that exceeded the expectations of many economists inspires slightly more optimism when drawing the economic development curve for the whole year. The economy will continue to draw most of its energy for growth from more active consumption, however this factor may be subdued by inflation in the nearest months”, said Mr. Ernestas Virbickas, Head of the Macroeconomics Division of the Economics and Financial Stability Service of the Bank of Lithuania.
Higher consumption at the end of last year and in the beginning of this year was determined by an increase in the number of the employed, a gradual rise of wages and the resulting improvement of expectations of residents. According to the forecasts by the Bank of Lithuania, the expected private consumption growth will make up 4.6 per cent this year and 3.1 per cent next year.
Another pillar of Lithuania’s economy – export – is expected to grow slower this year than last year, but faster than forecasted earlier – by 5.3 per cent (the earlier forecast was 3.9%). The forecast for 2013 remained unchanged: export is expected to grow by 5.8 per cent.
“Forecasts may also be corrected by constantly renewing concern about the economic situation of the euro area countries. Prevalence of poor expectations would negatively affect the volumes of orders to our exporters and thus the growth of the whole economy”, stated Mr. Virbickas.
According to him, inflation this year will be less affected by a substantial rise in food prices observed last year, however, with the oil price increasing more than expected, the pressure on fuel prices and administered prices (heat energy and natural gas prices) is rising this year. After the evaluation of these factors, it is projected that inflation in 2012 will be higher than forecasted earlier and make up 2.9 per cent (the earlier forecast was 2.1%), whereas in 2013 it should drop to 2.7 per cent (2.4%).
Owing to larger economic growth, a faster rise is also projected for wages. According to the latest forecasts, it should grow by 2.3 per cent this year (the earlier forecast was 1.6%) and 2.6 per cent (2.5%) in 2013.
The latest medium-term macroeconomic forecasts (146.5 KB download icon) are available on the website of the Bank of Lithuania.