Lithuania: GDP growth slows further

Mon, Apr 28 2008, 15:58 GMT
by Lars Christensen

Danske Bank A/S


GDP growth in Lithuania slowed to 6.4% y/y in Q1 08 from 8.0% y/y Q4 07, which is somewhat sharper than we had expected given other economic data for Q1. However, it is hardly surprising that GDP growth is losing steam given the excessive growth in recent years and the shocks that have hit the Lithuanian economy over the last year in the form of tighter credit conditions and higher inflation.

We have for some time been puzzled by the fact that Lithuanian growth did not mirror the sharp deceleration of growth as seen in Latvia and Estonia. Today’s GDP numbers, however, are an indication that the slowdown in the Lithuanian economy is now underway and we expect GDP growth to slow further in the coming months. We do not rule out some quarters of negative GDP growth (quarter-to-quarter) as seems to be the case in Latvia and Estonia.

Published on  Mon, Apr 28 2008, 16:00 GMT

Danske Bank  | Holmens Kanal 2-12, DK-1092 Copenhagen
http://www.danskebank.com/ | danskeresearch@danskebank.com

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