Macroeconomic Forecast Lithuania

Industrial output continued to strengthen in January in response to the restoration of full capacity at the Mazeikiu oil refinery, which accounts for almost one-fifth of manufacturing production. Industrial output grew by 8.5% y-o-y, with manufacturing expanding by 8.9% overall but by a more modest 4% excluding refining activities. We expect industrial production growth to accelerate to 8.5% in 2008, up from 4.0% in 2007, assisted by favourable base effects stemming from the 2007 supply shock in the refining sector.

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