Retail pushes Lithuania’s GDP higher

  • 2011-09-07
  • From wire reports

VILNIUS - The Lithuanian branch of Swedbank, based on July data, suggested that gross domestic product (GDP) growth might slow in the third quarter because annual growth in retail trade contracted rapidly, and there were signs of contraction in industry, reports LETA.

However, retail trade, excluding motor vehicles, continued its rapid increase and in July was 7.3 percent higher than a year ago. Despite the very negative global environment, consumer expectations declined by only two percentage points in August. Expectations and consumption may be boosted by the European Basketball Championship, which is being held this month in the country.

Second-quarter unemployment, in line with expectations, was at 15.6 percent, a sharp decline from 17.2 percent in the first quarter. This trend is likely to continue in the second half of this year, and we expect unemployment to be at 14.3 percent by year’s end. The rapidly increasing labor force activity rate suggests that the increase in emigration has not had a significant impact on the labor force.

Annual GDP growth in the second quarter of this year slowed to 6.3 percent (6.5 percent in the first quarter), mainly due to completion of the restocking process.