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29/03/2019   Lithuania’s economy will be driven by domestic demand, however the number of risk factors does not decrease

The National Audit Office, implementing the functions of the budget policy monitoring institution (fiscal institution), assessed the Economic Development Scenario for 2019–2022 prepared by the Ministry of Finance and concluded it to be suitable for the preparation of the Stability Programme of Lithuania for 2019 and the budgets of the general government.

Although the GDP growth has increased in the United States of America during the last year, it has slowed down in euro zone and China. The slower growth of China’s economy directly affects the euro zone. The global trade war and internal processes in the countries which are slowing down the growth of their economies create a domino effect – the slower growth of largest economies will negatively affect the exports of goods of Lithuania’s origin. The fiscal institution notes that domestic credit to private sector can slow down due to high political uncertainty in Europe. Financial markets that were fluctuating at the end of 2018 remain vulnerable.

”The growth of the Lithuania’s economy in 2019 is expected to slow down, because of uncertainty in international environment and remaining negative balance of external risk factors. The export and import growth projections for 2019 are reduced due to the slower growth of external demand. Domestic demand is expected to remain the main driver of the growth of Lithuania’s economy,” says Ingrida Vilkancaitė, the Chief specialist of the fiscal institution and adds, that the private consumption growth is caused by the growing purchasing power of the population.

Updated heat map of Lithuania’s economy for 2018 shows no significant changes. The tension in the labour market remains present, capacity utilization is at a high level, a slight decrease in inflation has not differed from multiannual average.

The Ministry of Finance has publicly announced Economic Development Scenario for 2019-2022 on the 21 March. The Fiscal institution has submitted an opinion on the endorsement of this scenario to the Parliament (Seimas).

 

Responsible for the information Communication Division
Last updated on 20 May 2019

National Audit Office of Lithuania

Pamėnkalnio St 27, LT-01113 Vilnius, Phone: + 370 5 266 6793, + 370 5 266 6752, Email: nao@vkontrole.lt.