Report Published: "Lithuania Business Forecast Report Q1 2015"

From: Fast Market Research, Inc.
Published: Fri Nov 21 2014

Core View

* The escalating trade war between Russia and the EU has prompted us to revise down our forecast for growth in Lithuania for 2014. Growth will accelerate in 2013, as geopolitical tensions in the region disperse, trade restrictions get lifted, and overall external demand improves.
* Lithuania's current account surplus will swing back into deficit in 2014 as the trade war between Russia and the EU will deepen the Baltic state's trade deficit. Going forward, we forecast modest current account deficits, underpinned by persistent trade and income deficits, and mitigated by growing services surplus, while resumption in foreign direct investment flows will ensure the country meets its external financing requirements.
* Despite the recent expulsion of a junior coalition partner out of the Lithuanian government, the centre-left cabinet of Prime Minister Algirdas Butkevicius maintains a solid majority in parliament, ensuring it will remain in power for the duration of its term ending 2016. Following the expulsion of the ethnic Polish party, we expect two energy deals between Lithuania and Poland to proceed less smoothly.

Full Report Details at

Major Forecast Changes

* The escalating trade war between Russia and the EU will exacerbate the slowdown in economic growth in Lithuania that we anticipated, prompting us to revise down our 2014 growth forecast - to 2.6% from 2.9% previously.
* We see slight near-term risks to Lithuania's budget deficit for 2014-2015 in light of geopolitical tensions between Russia and the EU over Ukraine. The fallout of the Ukraine crisis has suppressed tax revenues for the Baltic state and has prompted policymakers to ramp up military spending. As a result, we have adjusted our forecast for the budget gap to widen to 1.5% of GDP in 2014, from 1.3% previously. For 2015 we expect the shortfall to remain at 1.5%, against our previous forecast of 1.4%.

Risks To Outlook

* Still-depressed business investment into traditional sectors of the economy, such as...

The Lithuania Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Lithuania and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..

An influential new analysis of Lithuania's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

* Forecast the pace and stability of Lithuania's economic and industry growth through end-2017.
* Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
* Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.

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Company: Fast Market Research, Inc.
Contact Name: Bill Thompson
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