Projections of Lithuanian Economic Indicators (May 2010)

Three-Year Budget is Planned on the Basis of Basically Unchanged Scenario of Economic Indicators: Starting from this Year, the Economy will Begin to Recover

According to the data by the Department of Statistics, gross domestic product in the 1st quarter of  2010, as compared with the same period in 2009, decreased by 2.9 per cent – it shows that GDP fall is in line with GDP growth path for 2010 envisaged in the central scenario in February.  It is envisaged that due to the investment climate in Lithuania and recovery of export markets as well as the absorption of advanced EU assistance the annual growth in the 2nd quarter is expected to make up about 4 – 5 per cent. Therefore, GDP growth scenario of 1.6 per cent for 2010 created in February will basically remain unchanged.

At present the only contributor to national economic growth is exporting sectors, while domestic-demand oriented sectors still show only initial signs of stabilisation. Levelling –off of wages on-going along with growth in exports and export prices demonstrate an improved competitiveness of Lithuania’s economy.

It is envisaged that positive changes in export observed from the second half of the year 2009 will further continue and from 2011 will make a sufficient background for domestic demand growth. However, due to a necessity to consolidate public finances, the consumption of this sector will be decreasing till the year 2012.

All the aforementioned positive factors will create conditions for GDP growth of 2.8 per cent in 2011. It is envisaged that in 2012, due to a negative effect of decreased investments during the crisis in 2009 to economic potential growth, GDP growth will slow down to 1.2 per cent. It is envisaged that after enhance of investors’ confidence in regional perspectives and increase of investments into exporting sectors, GDP could grow by 2.4 per cent in 2013.

The scenario of economic indicators for budget planning is created on the basis of common assumptions for EU economic development used by the European Commission in spring. Economic growth will depend on the situation in global financial markets and economies of main foreign trade partners as well as Lithuania’s competitive ability. 

Despite economic recovery planned in 2010, the rate of unemployment will further remain reasonably high during the entire medium term. It is envisaged that the rate of unemployment will grow up to 16.7 per cent in 2010, while from 2011 it will start gradually decreasing and in 2011–2013 it will represent 15.5 per cent, 13.9 per cent and  12.3 per cent, accordingly.

Statistical data shows that, after evaluation of seasonal impact, fall in national wages slightly decelerated (especially in construction sector), while in private sector in the 4th quarter of 2009, as compared with the previous quarter, wages even increased by 0.4 per cent, therefore, the dynamics of wages will be more favourable by several percentage points than it was planned in February: in 2010 wages may fall by 5.3 per cent, while from the year 2011, in 2011–2013,  wages are envisaged to grow by 0.6 per cent, 0.9 per cent and 1.9 per cent, accordingly. 

Due to higher growth in global prices of oil, food and other products predicted by the European Commission as well as changed wage trends, the perspective of price change estimated by coordinated consumer price index (hereinafter referred to as CCPI) is changed accordingly: substantially slower deflation estimated by CCPI is envisaged in February. In 2010 the average annual deflation will represent 0.1 per cent, while inflation in December could constitute about 0.6 per cent. In 2011 the average annual inflation would make up 1.5 per cent, in 2012 – 2.0 per cent and in 2013 – 2.5 per cent.

 

KEY MACROECONOMIC INDICATORS 
Indicators 2009 Projection 2010-05-07
2010 2011 2012 2013
GDP growth/chain-linked volume growth, percentage   -14,8 1,6 2,8 1,2 2,4
HCPI (average annual)/ Consumer price index, per cent 4,2 -0,1 1,5 2,0 2,5
HCPI (monthly annual inflation)/ Consumer price index, per cent 1,2 0,6 1,7 2,5 3,0
Growth of average monthly gross earnings, previous period = 100 95,4 94,7 100,6 100,9 101,9
Average monthly gross earnings, LTL 2052,4 1944,6 1957,1 1974,8 2011,5
Unemployment rate, per cent (according to labour force survey) 13,7 16,7 15,5 13,9 12,3
Balance of goods and services, percentage share of GDP -1,1 2,8 1,7 0,2 -1,7
Growth of consumption / chain-linked volume  growth, percentage -13,3 -5,3 1,0 2,4 3,7
Growth of gross fixed capital formation / chain-linked volume  growth, percentage -39,1 15,1 14,1 2,0 5,0
GDP at current prices growth, percentage -17,2 1,9 3,7 2,9 5,7

 

ECONOMIC INDICATORS, current prices, LTL mill.
 
Indicators 2009 Projection 2010-05-07
2010 2011 2012 2013
Final consumption expenditure 82955 77963 79168 82284 88190
percentage share of GDP 90 83 81 82 83
nominal growth, percentage -12 -6 2 4 7
Households consumption expenditure 62707 59382 62983 66666 71417
percentage share of GDP 68 63 65 67 68
Government consumption expenditure 20011 18358 15958 15383 16522
percentage share of GDP 22 20 16 15 16
NPI 1 consumption expenditure 237 222 226 235 252
percentage share of GDP 0 0 0 0 0
Gross capital formation 10077 13180 16363 17427 19252
percentage share of GDP 11 14 17 17 18
nominal growth, percentage -66 31 24 7 10
Balance of trade -1016 2616 1657 249 -1772
percentage share of GDP -1 3 2 0 -2
Gross domestic product 92016 93759 97188 99960 105670
nominal growth, percentage -17 2 4 3 6
Gross domestic product, chain-linked volume 69043 70133 72097 72937 74688
chain-linked volume  growth, percentage -15 2 3 1 2
  2009 2010 2011 2012 2013
1 - NPI – non-profit institutions

 

LABOUR MARKET, EARNINGS AND PRICES
 
Indicators Unit of measure 2009 Projection 2010-05-07
2010 2011 2012 2013
Average monthly gross earnings LTL 2052,4 1944,6 1957,1 1974,8 2011,5
Indices of the average monthly gross earnings, previous period = 100    95,4 94,7 100,6 100,9 101,9
Annual fund for wages and salaries LTL mill. 24883,6 22887,6 23544,8 24047,3 24982,5
Average annual number of employed, acc. to labour force survey Thous. 1415,9 1354,8 1354,8 1365,8 1385,8
o/w: average annual conditional number of employees 1, acc. to labour force survey Thous. 1010,3 980,8 1002,5 1014,8 1035,0
Average annual number of economically active population, acc. to labour force survey  Thous. 1640,9 1625,8 1603,2 1586,9 1580,6
Average annual number of the unemployed, acc. to labour force survey Thous. 225,0 271,0 248,4 221,1 194,8
Unemployment rate, acc. to labour force survey  per cent 13,7 16,7 15,5 13,9 12,3
Change of consumption goods and services price index            
end of December per cent 1,2 0,6 1,7 2,5 3,0
average annual per cent 4,2 -0,1 1,5 2,0 2,5
1 - hired employees, regrouped into employed full-time.

 

Last updated: 11-09-2019