Lithuania's 2016 GDP growth was revised 0.1pp higher to 2.3% in a second estimate released by Statistics Lithuania on March 1.
The reading suggests the economy expanded significantly faster than the 1.8% expansion in 2015. A fourth quarter surge to 3.2% did much of the heavy lifting, the Baltic state’s statistical office confirmed. In seasonally adjusted terms, growth was 2.2% in 2016 and 3% y/y in the fourth quarter. In adjusted quarterly terms, GDP expanded 1.4%, while dwindling an unadjusted 3.9%.
The details of growth remained largely unchanged compared to the first estimate. In the fourth quarter, the expansion was mainly driven by construction, wholesale and retail trade, repair of motor vehicles and motorcycles, transportation and storage, accommodation and food service, and agriculture, Statistics Lithuania notes.
Consumption remained the main pillar of growth, supported by continued improvement in the labour market, robust and broad-based wage growth, and an acceleration in the household loan portfolio, Swedbank notes.
Investment, on the other hand, did not manage growth in 2016, despite a 5.7% y/y rise in the fourth quarter. Exports increased 2.9% in 2016, driven by services.
Swedbank is optimistic for the medium term. “We expect economic growth to accelerate to 2.8% this year, before easing to 2.5% in 2018. Growth in exports and investments is expected to pick up this year, [while] household consumption will remain the main driver of growth,” the bank notes.
“However, growth in household consumption will ease as real wage growth subsides. Investment growth will strengthen thanks mainly to rising public investments, but also due to faster distribution of EU funds," it adds.