Lithuania’s economy has shown resilience in recent years and should continue to grow this year, but inflation will also rise, the International Monetary Fund (IMF) said as it assessed Lithuania’s economic situation and prospects in Vilnius last week.
“The Lithuanian economy has shown notable resilience against a series of unprecedented shocks in recent years. Following subdued growth in 2023, the economy gained momentum in 2024 and is expected to expand further in 2025,” the IMF said in a statement.
“After further disinflation in 2024, inflation will rise in 2025, in part due to higher indirect taxes, before stabilizing above 2 percent in the medium term,” the institution said.
Last October, the IMF forecast 2.6 percent GDP growth and 2.4 percent inflation for Lithuania in 2025. It estimates that inflation stood at 1.9 percent in late 2024.
“Looking forward, the positive growth momentum will be supported by easing monetary conditions, the recovery of corporate profits, and the healthy financial position of households,” the Fund said in the press release.
“However, weaker than expected external demand – especially in key eurozone trade partners – and policy uncertainty in major economies could weigh on domestic sentiment and exports performance, posing downside risks to the growth outlook,” it added.
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