Lithuania‘s economy will grow faster this year driven by increases in exports and strong domestic demand, according to SEB Bank.
SEB analysts expect that GDP growth in 2016 will be 2.8% and rise to 3.2% in 2017 much faster than last year.
Lithuania‘s exports this year will grow by 3.5% while imports will rise 2%. SEB Bank analysts said import growth would be driven by rapid growth in consumer demand.
“Domestic consumption will remain a robust support for the GDP growth this year. However, the trends, if compared to the last year, have changed – rapidly growing food, non-alcoholic drinks and tobacco sales, while the demand growth of non0-basic necessity goods, at least so far, is not as impressive as during most of the 2015,” said Gitanas Nausėda, the advisor to the SEB president.
“It is becoming obvious that it will be no longer possible in the future to raise the minimum monthly wage at a pace as in 2015-2016, since the minimum monthly wage and the average wage ratio has gotten closer to the optimum 50% level. However, all is not lost – non taxable income level can and should be increased as it has been growing more slowly than the minimum monthly wage recently,” said Nausėda.
The minimum monthly wage is set to rise to €380 this year on July 1, the average nominal wages this year could grow by 7% and next year – by about 6%.