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Lithuania Country Risk Report Q4 2018

Lithuania Country Risk Report Q4 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.

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
Rising Imbalances To Slow Growth In Lithuania
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 & FINANCIAL ACCOUNT BALANCE
TABLE: TOP FIVE GOODS IMPORTS IN 2017
TABLE: TOP FIVE GOODS EXPORTS IN 2017
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
Monetary Policy
Structural Fiscal Position
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
Currency Forecast
EUR: Strength Unlikely Despite Tighter Monetary Policy
TABLE: EUROZONE CURRENCY FORECAST
Lithuania Country Risk Q4 2018Contents10-Year Forecast
The Lithuanian Economy To 2027
Structurally Lower Growth, But Outlook Remains Stable
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Corruption Fight And EU Integration Will Dominate The Lithuanian Political Agenda
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Policy Will Struggle To Navigate Key Challenges
Global Macro Outlook
Pressure On EMs Grows, As Do Divergences
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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