The International Monetary Fund has downgraded its forecast for the Lithuanian economy and expects the country’s GDP to decline by 0.3 percent this year.
Last October, the IMF forecast that Lithuania’s GDP would grow by 1.1 percent in 2023.
However, the IMF has upgraded Lithuania’s GDP growth forecast for 2024 to 2.7 percent, the Bank of Lithuania has said.
The IMF expects inflation in Lithuania to decrease slower than forecast last autumn and to reach 10.5 percent this year and 5.8 percent next year.
According to the IMF, unemployment in Lithuania will reach 7 percent this year and 6.5 percent next year.
The IMF forecasts that global economic growth will slow from 3.4 percent last year to 2.8 percent this year and accelerate to 3 percent in 2024. The euro area economy is expected to grow by 0.8 percent this year and by 1.4 percent in 2024.
The main reason for the slowdown is said to be the rise in inflation following the pandemic and Russia’s invasion of Ukraine, which central banks are trying to contain by raising base interest rates.
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