Macroeconomic Forecast Lithuania

July 2007 | Macroeconomic Forecasts

The current account deficit widened substantially in Q107 to 13.2% of GDP, up from 10.4% in the same period of 2006. The increase was driven by a 38% y-o-y jump in the trade deficit, which in turn reflected modest export growth of 6.5% y-o-y and robust import growth of 13.8% y-o-y. The trade gap was partially offset by an increase in the current transfers surplus, following a sharp rise in EU funds. Export performance is being seriously hampered by the disruption to processing activity at the Mazeikiu oil refinery, which is unlikely to be resolved before 2008. BMI expects the current account deficit to amount to around 12% of GDP this year, with upside risks.

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