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Lithuania Country Risk Report 20 2018

Lithuania Country Risk Report 20 2018

The Lithuanian economy will continue to record robust levels of growth over the coming quarters, buoyed by strong domestic demand. That said, rapidly rising labour costs and higher inflation will ultimately leave this pace of growth unsustainable, with 2017 having marked a peak in the growth cycle.

Tensions with Russia will continue to pose the largest threat to investor interests in Lithuania over the coming months. While we do not expect an outright conflict between the two states, the threat of Russian military intervention will keep defence spending a key priority of Lithuania's fiscal policy and encourage closer relations with the rest of the EU.


Executive Summary
Core Views
Key Risks
Chapter 1: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Growth Outlook
Growth To Ease
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
Outlook On External Position
TABLE: CAPITAL AND FINANCIAL ACCOUNT BALANCE
TABLE: TOP 5 GOODS IMPORTS IN 2015
TABLE: TOP 5 GOODS EXPORTS IN 2015
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
Monetary Policy
ECB Normalisation Finally Nearing
Structural Fiscal Position
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
Currency Forecast
EUR: Rally To Be Limited
TABLE: BMI EUROZONE CURRENCY FORECAST
Chapter 2: 10-Year Forecast
The Lithuanian Economy To 2027
Greater Stability But Lower Growth
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Chapter 3: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
Ruling Coalition In Precarious Position
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Policy Will Struggle To Navigate Key Challenges
Chapter 4: Operational Risk
Developed States
TABLE: LABOUR MARKET RISK INDEX
TABLE: LOGISTICS RISK INDEX
TABLE: CRIME AND SECURITY RISK INDEX
TABLE: TRADE AND INVESTMENT RISK INDEX
Chapter 5: BMI Global Macro Outlook
Trade Tensions Take Centre Stage
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
TABLE: LITHUANIA – MACROECONOMIC DATA & FORECASTS

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