Lithuania’s Q1 GDP growth rate modest but anticipated

Financial analyst Gitanas Nausėda, advisor to the SEB bank president, also says that looking through the eyes of an observer who has been spoiled by the economic growth in the recent years, the current GDP result is rather modest.

“On the other hand, let’s not forget that many member-states of the European Union would see a similar growth rate as a big achievement, while their stock markets would flourish after such macroeconomic news,” Nausėda said.

According to DNB bank analyst Indrė Genytė-Pikčienė, Lithuania’s economic vitality had been supported by an active construction sector. This year’s warm winter was very favourable to the construction sector in Lithuania.

When it comes to foreign trade outlook, the DNB’s expert notes that Lithuania’s exporters find hope in the Western markets which have been showing first more noticeable signs of recovery.

“The euro area consumers’ confidence index has reached its highest since 2007; retail trade turnover of the region has also improved. The signs of more active consumption in the West allow us to expect that eventually this market’s appetite will build up for Lithuania’s exports too,” Genytė-Pikčienė said.

However, she admits that the first six months of 2015 will be the most difficult for Lithuania in terms of short-term economic prospects.

SEB’s Nausėda, meanwhile, points out that Lithuania’s exporters are currently opening windows to the third markets. Penetration to the new markets, according to the expert, can take up to 3-5 years, which in the nearest future may cost the price of deteriorating financial results: additional marketing and logistics costs, lower profit margins, etc.