LT: Nordea raises Lithuania's 2013 GDP growth forecast to 4% in 2013.

By bne IntelliNews March 20, 2013
Nordea has raised its Lithuanian GDP growth forecast to 4% in 2013, from the previous estimate of 3.3% last September. It expects Lithuania's economy to expand by 4.2 percent in 2014, up from the previous forecast of 3.5%. In addition, Nordea predicts that in 2013 Lithuania's wages will increase by 6%, in other words, they will increase slightly faster than the projected inflation of 3%, yet, slower than labour productivity. According to revised data by Statistics Lithuania, in Q4/12 GDP in current prices amounted to LTL 29.4bn, with GDP growing by 4.1% y/y and declining by 4.1% q/q. Previously GDP growth was estimated at 4%. Fastest value added in the reporting quarter was seen in industry, trade, storage, and transportation. In 2012 real GDP growth amounted to 3.6%. According to the latest economic outlook by EC Lithuania's GDP growth is seen at 3.1% in 2013 and 3.6% in 2014, unchanged from the previous outlook published in November. Public consumption is seen increasing by 2.9% in 2013 and 3.9% in 2014, while public consumption by 0.6% and 1.4%, respectively, EC believes. Inflation is forecasted at 2.4% in 2013 and 2.9% in 2014, while unemployment declining to 11.4% in 2013 and further to 9.8% in 2014. In general exceptionally high net exports are seen as offsetting the effects of slower domestic demand in 2012, with last years GDP growth estimated at 3.6%. At the same time EC notes that last years growth was partially based on one-off events such as exceptionally good harvest. GDP growth is expected to support fiscal improvements, with budget balance seen narrowing form estimated -3.2% of GDP in 2012 to -2.9% of GDP in 2013 and -2.4% in 2014. The Bank of Lithuania forecasts GDP growth of 3.8% y/y in 2014. In 2013 the bank maintained its forecast of 3.1% y/y GDP growth.

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