Lithuania’s economic growth will slow down in the near future, but the country will avoid a recession, Prime Minister Ingrida Šimonytė said on Friday.
“Considering what I see, what is being projected by those who have already published[ forecasts], we don’t see a negative territory so far,” she said in an interview with BNS on Friday. “However, [...] the pace of [economic] growth will be obviously slower, which will have such consequences as slower wage growth and, of course, slower inflation..”
According to the prime minister, the Finance Ministry should update and publish its latest macroeconomic projections next week.
The Finance Ministry has said that the updated forecasts will be used to draft the 2023 budget, which should earmark more than 1 billion euros for compensating households and businesses for increased energy costs.
According to Šimonytė, the government intends to submit the 2023 budget bill to the Seimas early in October, ie earlier than usual.
According to the latest data from Statistics Lithuania, the country‘s real gross domestic product (GDP) contracted by 0.5 percent in the second quarter versus the first quarter, but rose by 2.6 percent in year-on-year terms.
SEB Bank revised its forecast for Lithuania's GDP growth in 2022 to 1.5 percent in late August, up from 0.9 percent in May. Meanwhile, Swedbank upgraded its forecast for Lithuania's GDP growth this year to 2 percent, but cut its 2023 growth forecast to 0 percent.
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