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Lithuania Country Risk Report Q1 2020

Lithuania Country Risk Report Q1 2020

The Lithuanian economy will continue to record robust levels of growth over the coming quarters, buoyed by strong domestic demand. Rising capacity constraints, including rapidly rising labour costs will ultimately see growth moderate to more sustainable levels, 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
Lithuania To Catch Up With Peers
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 FIVE GOODS IMPORTS IN 2018
TABLE: TOP FIVE GOODS EXPORTS IN 2018
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
Monetary Policy
Eurozone's Monetary Policy More Accomodative For Longer
Structural Fiscal Position
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
Currency Forecast
EUR: Retreating On Dollar Strength
TABLE: EUROZONE CURRENCY FORECAST
THIS 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.Lithuania Country Risk Q1 2020Contents10-Year Forecast
The Lithuanian Economy To 2028
Structurally Lower Growth, But Outlook Remains Stable
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Lithuania-Belarus Ties To Remain Tense
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Lithuania-Belarus Ties To Remain Tense
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
Downside Revisions To Stabilise Somewhat, But Policy Risks Remain
TABLE: GLOBAL MACROECONOMIC FORECASTS (2018-2023)
TABLE: DEVELOPED MARKETS – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: LITHUANIA – MACROECONOMIC DATA AND FORECASTS

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