VILNIUS - Lithuania's gross domestic product grew 8.2 percent in the first half of 2006, higher than analysts' expectations, raising fears about possible economic overheating. The Statistics Department reported on July 28 that GDP rose to 37.3 billion litas (10.8 billion euros) over the first half of the year, up 8.2 percent from the same period last year. In the second quarter alone GDP rose by 7.7 percent year-on-year.
GDP per capita from April to June rose 8 percent year-on-year to 5,959 litas, while over the six months it reached 10,963 litas.
The higher-than-expected result puts Lithuania in the same camp as Estonia and Latvia, whose super-hot economies are near the boiling point.
Gitanas Nauseda, advisor to the president of SEB Vilniaus Bankas, told the Baltic News Service, "A possible overheating of the Baltic economies has already attracted attention from international institutions. Our capabilities to protect ourselves against this phenomenon are weak. The new government's program does not say a word about that. What it does speak about are raising state spending and indexing of revenue."
Nauseda said a moderate slowdown in GDP growth rates could be expected in the second half of the year. SEB Vilniaus Bankas forecasts that the economy will grow by 6.5 percent in the full year 2006.
"I think that economic growth will continue to decelerate in the second half. I have to admit, however, that growth was stronger than we had expected. The economy expanded by 7.7 percent in the second quarter, while we had forecast a 7 percent growth rate," said Nauseda.
The Lithuanian economy grew 7.5 percent last year, while GDP per capita grew 8.1 percent to 20,819 litas.