Macroeconomic Forecast Lithuania

Industrial output contracted by 15.2% y-o-y in September according to latest data from Statistics Lithuania, accelerating from the 13.2% drop recorded in August. September's figure brought the average rate of industrial production growth to -16.1% in 2009, and underscores our view that output in the Baltic economy will not likely return to positive growth until at least 2010. Going forward, we maintain our view that as external demand across the eurozone begins to pick up in Q4, the pace of contraction will begin to slow, underscoring our forecast for industrial output to come in at -10% by end-2009.

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