Comment on 2006-2009 Economic Indicator Projections Published

Date

2006 11 24

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Vilnius, November 24, 2006. The Ministry of Finance provided the 2008-2009 update of the medium-term projections of economic indicators published on the 4th of October and comments on the economic trends.

As was published before, the Ministry of Finance forecasts that in the medium term Lithuania will retain rapid growth of the economy: GDP increase levels may amount to 7.8 per cent in 2006 and 6.3 per cent in 2007. GDP would grow by 5.3 per cent in 2008 and 4.5 per cent in 2009.

Price increases for energy resources in 2005-2008 (before 2008, prices for gas imports will have grown more than twice compared to 2005), Lithuania’s commitments to the EU to lift excise duties, the addressing of issues concerning residential deposits and compensation for real estate as well as growing wage levels will, in the medium term, substantially affect inflation. The inflation conditioned by natural gas alone will comprise 0.9 percentage points in 2006 and about 1.7 percentage points in 2007 (1.3 owing to price increases for heating and 0.4 owing to price increases for domestic gas). It is likely that inflation will drop and stabilise in 2009.

Reliance on macroeconomic stability prompted private investments and consumption, therefore from the second quarter in 2001 to the same quarter in 2006 the number of employed persons rose by 9.4 per cent. Growing demand for workforce will bring the country’s unemployment levels down from 8.3 per cent (based on the findings from the employment survey) in 2005 to 4.9 per cent in 2009.  Forecasts are that the trends which started in 2004 will continue: the country’s average monthly wage will grow. It is envisaged that the gross average monthly wage will rise from 1,289.5 Lt in 2005 to 1,991.5 Lt in 2009.

 

Public Relations Division