Macroeconomic Forecast Lithuania

We maintain our view that Lithuania will be unable to avoid a second consecutive full-year recession, and we have penciled in real GDP growth of -0.3% for 2010 accordingly. Private consumption will remain particularly weak through the medium term, as households continue to focus on paying down their existing stock of debt. Beyond 2010, we stress that a more fundamental demand-driven recovery will likely remain off the cards, with real GDP forecast to expand by an average 4.0% between 2011-2014.

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