Macroeconomic Forecast Lithuania

May 2008 | Macroeconomic Forecasts

Faster export growth helped contain the growth in the current account deficit in the first two months of the year. The external gap widened by less than 9% y-o-y thanks to a 34% increase in merchandise exports. Much of the export increase reflected the return to full capacity of the Mazeikiu oil refinery at the start of the year, but sectors such as fertilisers also exhibited strong growth. With domestic demand remaining reasonably robust in the early part of the year and international commodity prices soaring, imports also increased significantly in value terms (up 27% in January-February). We expect the current account deficit to narrow to 11.0% of GDP in 2008 from 13.7% in 2007.

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