Today Statistics Lithuania released 1st quarter GDP estimate. On a year-on-year basis GDP increased 2.9 percent. This reading was generally in line with our expectations.
We suspect that GDP growth in the recent quarter was quite balanced. Looking at the remaining 2014, economy should sustain similar pace of growth. Better households’ expectations and spending, vigorous real estate market, and accelerating demand for investments may warrant GDP growth above 3 percent. However, heightened risks in Russia, the key export market, and depreciated ruble will have a negative effect on Lithuanian economy. Thus we view 3 percent growth for the rest of 2014 as our base case.
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