Macroeconomic Forecast Lithuania

Our 2012 projections for Lithuania’s current account appear to be well placed after the central bank released monthly balance of payments data for the first six months of the year. We are currently forecasting a full-year current account deficit forecast of EUR1.67bn (5.2% of GDP), a sizable increase over the moderate EUR517mn (1.7% of GDP) shortfall recorded in 2011. In H112, the current account shortfall stood at EUR649.29mn, with the trade in goods deficit measuring EUR742.80mn during this period. We expect the current account shortfall to remain pronounced over the coming years, as domestic demand gradually continues to build up following the country’s deep economic contraction in 2009 and only moderate economic growth thereafter.

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