VILNIUS, Dec 19, BNS – The Bank of Lithuania on Tuesday revised its Lithuanian GDP growth forecast for 2023 upwards to a 0.2 percent contraction, but cut its 2024 economic growth projection to 1.8 percent. 

The central bank forecast in September that the economy would contract by 0.6 percent this year before returning to 2.1 percent growth next year. 

“I would describe the Lithuanian economy as being overwhelmed by challenges, subdued, but not losing its resilience," Gediminas Simkus, the central bank's governor, told a press conference on Tuesday.

According to him, the Lithuanian economy has the potential to grow faster, but a return to more normal growth is hampered by slow recovery of domestic and external demand.

According to the central bank, sluggish growth in international markets is preventing a faster recovery of Lithuanian industry, which is highly export-oriented and generates a large share of added value. The country's exports are now expected to grow by 0.5 percent next year, following a 5.3 percent drop this year.

"Although the output of some industries is much lower than a year ago, production volumes have not decreased over the past three months, even in those industries that have fallen the most... This creates a real basis for saying that the situation is stabilizing", Simkus said.

The Bank of Lithuania now expects the annual inflation to reach 8.8 percent this year before going down to 2.5 percent next year.

The unemployment rate is seen reaching 6.7 percent in 2023 and 6.5 percent in 2024, while employment is forecast to increase by 1 percent this year before contracting by 0.1 percent next year.

Wages are expected to rise by 12.2 percent and 9.4 percent, respectively.

redakcija@bns.lt "mailto:redakcija@bns.lt", +370 5 205 85 11, Vilnius newsroom