Market Report, "Lithuania Country Risk Report Q1 2016", published
New Country Reports market report from Business Monitor International: "Lithuania Country Risk Report Q1 2016"
[ClickPress, Wed Oct 28 2015] We have revised down our real GDP growth outlook for 2015 and 2016 as the impact of Russia's economic crisis on Lithuania has been more pronounced than we anticipated. While weak external demand will not leave domestic demand unscathed, private consumption will remain the main driver of growth in the coming quarters.
Subdued export growth has weighed on Lithuania's external accounts in 2014 and will continue to do so in 2015, reflected in the current account surplus remaining in deficit in 2015. For 2016, we forecast the deficit to reverse back into surplus due to the brightening outlook for external demand from Lithuania's main export markets.
Relations between Lithuania and Russia will remain tense, as Vilnius maintains a tough stance towards perceived Russian expansionism. However, tensions are unlikely to escalate beyond manageable levels.
Full Report Details at
Major Forecast Changes
Russia's economic and currency crisis which erupted in H214 has had a knock-on effect on the Lithuanian economy as Russia is Lithuania's main export market, accounting for more than 20% of total exports, and Q115 economic data suggests that the impact has been larger than we expected. Q115 real GDP growth slowed to 1.2% y-o-y from 2.4% in Q414, and high-frequency indicators in H115 have pointed to little in the way of rapid acceleration in economic growth. As a result, we have downgraded our forecast for real GDP growth to 2.5% in 2015 and 3.1% in 2016, from our previous forecasts of 2.8% and 3.3% respectively.
Risks To Outlook
Still-depressed business investment into traditional sectors of the economy, such as construction, do not bode well for a continuation of the ongoing trend in GFCF growth. Indeed, recent years have shown that this expenditure component of GDP has been volatile, and we cannot rule out an erratic recovery in fixed investment going forward.
The Lithuania Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Lithuania. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.
An influential new analysis of Lithuania's economic, political and financial prospects through end-2019, just published by award-winning forecasters, BMI Research.
* Forecast the pace and stability of Lithuania's economic and industry growth through end-2019.
* Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
* Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
* Contextualise Lithuania's country risks against regional peers using BMI's country comparative Risk Index system.
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