Statistics Lithuania estimates that in 2013 Lithuanian GDP increased by 3.4%. According to experts, domestic demand played a substantial role in 2013 and maintained the growth of Lithuania's economy.
"In 2013 Lithuanian GDP growth was lower than in 2012. Although early numbers allowed to forecast 4% growth but by mid-year more modest forecasts had to be made. Nonetheless, the fact that 3% margin was exceeded can be assessed favourably, while Lithuanian economy will be among growth leaders in Europe for another year," said Ruta Medaiskyte, Senior Economist at Finasta Bank.
Medaiskyte forecasts that Lithuanian economy growth in 2014 might reach 3.6%. However, a lot will depend on the state of the main export markets.
"Europe is showing signs of recovery, although we have to wait and see whether this will actually continue and determine higher demand of exporters. Most probably, early this year, we will still have to rely on domestic economic resources," said Medaiskyte.
Meanwhile, according to DNB Bank projections Lithuanian economy will grow by 3.5% in 2014.
"Assessing short-term prospects of Lithuanian economy it should be noted that even though export momentum was lost, the forecasted recovery of global markets and Western markets important to Lithuania will provide some energy. The good news is that sectors focusing on the domestic market are already accelerating, while economic growth moved by both external and domestic markets is a path to balanced and sustainable development," said Indre Genyte-Pikciene, Senior Analyst at DNB Bank.
According to Genyte-Pikciene, employers will have to allocate more funds to maintain motivation of workforce. As wages start growing faster and workforce cost increases after a long break, companies will be forced to seek for efficiency sources elsewhere.
Meanwhile, improving future assessment indicators, growing domestic trade volume and more active borrowing shows that consumption is increasing. The trend suggests that residents have more confidence in the future, are spending money, have once again started to borrow for housing, consumption, holidays and other needs.
