Macroeconomic Forecast Lithuania

BMI View: The current account shortfall almost doubled as a proportion of GDP in Q106, to 10.7% from 5.4% in Q105, according to quarterly data. The increase mirrored a sharp rise in the investment ratio and a decrease in the savings ratio. Monthly data for April and May suggest the growth of the deficit probably moderated in Q2. Merchandise exports expanded by 29% in value terms in the first five months of the year, while imports rose by 28%. We expect the current account deficit to reach 7.5% of GDP this year, compared to 6.9% in 2005.

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