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Lithuania Country Risk Report Q1 2019

Lithuania Country Risk Report Q1 2019

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

Key Risks

An escalation of tensions with Russia could weigh on investor sentiment, which could potentially have disastrous consequences for Lithuania's economy, given the significant volume of foreign claims on capital


Executive Summary
Core Views
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Growth To Ease, But Outlook Remains Robust
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 2017
TABLE: TOP 5 GOODS EXPORTS IN 2017
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
Monetary Policy
ECB Has Few Options But To Gradually Tighten
Structural Fiscal Position
TABLE: MAIN REVENUE & EXPENDITURE CATEGORIES
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
Currency Forecast
EUR: Gradual Appreciation Amid End Of QE
TABLE: EUROZONE CURRENCY FORECAST
10-Year Forecast
Structurally Lower Growth, But Outlook Remains Stable
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Lithuania Country Risk Q1 2019THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings’ Credit Rating. Any comments or data included in the report are solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings’ analysts do not share data or information with Fitch Solutions Macro Research.ContentsPolitical Outlook
Domestic Politics
Lithuania Caught In The Middle Of European Alliances
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Policy Will Struggle To Navigate Key Challenges
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
Global Macro Outlook
Contagion Risks Limited To EMs For Now
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES, REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS, REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: LITHUANIA – MACROECONOMIC DATA & FORECASTS

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