Macroeconomic Forecast Lithuania

The ongoing correction to Lithuania's external asymmetries has continued unabated through the first nine months of 2009, with the country's current account flipping into surplus to the tune of EUR281mn, underpinning our forecast for the economy to post its first current account surplus on record this year. Indeed, we project the current account posting a surplus equivalent to 0.3% of GDP, driven in large part by a marked reversal of financial account inflows. While we forecast the current account flipping back into deficit by 2011, and averaging a relatively benign 2.3% of GDP until 2014, we nevertheless caution that the days of double-digit shortfalls are now well behind us.

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