1. Market Research
  2. > Energy & Environment
  3. > Energy
  4. > Oil and Gas Energy Market Trends
  5. > Lithuania Business Forecast Report Q3 2014

Lithuania Business Forecast Report Q3 2014

  • April 2014
  • -
  • Business Monitor International
  • -
  • 32 pages

Core Views

Recent growing geopolitical tensions between Russia and the West over Ukraine will darken investor sentiment in 2014, weighing on Lithuania’s trade flows and domestic demand. We expect goods exports to expand by 6.5% in 2014, down from 7.0% growth in 2013. Lithuania’s fiscal consolidation prospects remain in place with the budget deficit to narrow to 2.9% of GDP in 2014 and to 2.6% in 2015 from an estimated 3.3% in 2013. Despite the growing external public debts in recent years, the government’s debt dynamics remain on a stable footing due to the government’s fiscal consolidation efforts and the upcoming euro adoption which will bolster investor confidence
and anchor borrowing costs.

Real GDP growth in Lithuania will arrive at 3.3% in 2014 equal to the outturn for 2013, before slowing to 3.1% in 2015. We expect fixed investment to slow to 5.0% in 2014, and to 4.0% in 2015, down from 12.8% in 2013, as regional geopolitical tensions weigh on investor sentiment.

Major Forecast Changes

We have revised slightly our forecasts for Lithuania’s budget deficit for 2014 to 2.9% of GDP from 2.4% previously as the government has pledged to ramp up military spending to 2.0% of GDP from the current 0.9% level. Nevertheless, we maintain that this will not jeopardise Lithuania’s prospects of joining the eurozone by 2015.

Table Of Contents

Lithuania Business Forecast Report Q3 2014
Executive Summary 5
Core Views 5
Major Forecast Changes 5
Key Risks To Outlook 5
Chapter 1: Political Outlook 7
SWOT Analysis 7
BMI Political Risk Ratings 7
Domestic Politics 8
LNG Progress To Reduce Russian Leverage 8
With the completion of Klaipeda's floating storage and regasification unit, Lithuania looks set to become the Baltic's first LNG importer.
By diversifying away from its reliance on Russian energy imports, this significantly improves Lithuania's political risk profile, leaving it
less exposed than some regional peers to pressure from Russia.
Table: Political Overview 8
Long-Term Political Outlook 9
Convergence By No Means Assured 9
While Lithuania's long-term political outlook remains among the most stable in the emerging Europe region, we nevertheless caution
that the country's convergence with Western political and economic institutions through 2023 is by no means assured. In particular,
we highlight the aftermath of 2009's financial crisis as putting the country at a critical juncture. Indeed, dealing with an economy which
is set to post significantly lower trend growth over the long term (compared to pre-crisis levels), while balancing the need to pursue a
more pragmatic foreign policy with Russia and the demands of an increasingly nationalist electorate, will pose significant challenges for
Lithuanian governments to 2023.
Chapter 2: Economic Outlook 13
SWOT Analysis 13
BMI Economic Risk Ratings 13
Economic Activity 14
Rebound On Track, But At A Slower Pace 14
Real GDP in Lithuania will continue recovering from its 15% plunge in 2009 and expand by 3.3 % in 2014, equal to the pace of recovery
in 2013, before slowing slightly to 3.1% in 2015. While the recovery in domestic demand will remain on track, it will moderate slightly
due to the ongoing deleveraging in the private sector and tensions in Ukraine, which will weigh on sentiment and the country's trade
dynamics.
TABLE: ECONOMIC ACTIVITY 14
Fiscal Policy 16
Euro Adoption Prospects To Ensure Fiscal Probity 16
We forecast Lithuania's budget deficit to narrow to 2.6% of GDP in 2014-2015 from an estimated 2.9% in 2013. Despite the growing
external public debts in recent years, the government's debt dynamics remain on a stable footing due to the government's fiscal
consolidation efforts and the upcoming euro adoption which will bolster investor confidence and anchor borrowing costs.
TABLE: FISCAL POLICY 16
Monetary Policy 17
Subdued, But Stable Inflation Outlook 17
We expect inflation to average 0.7% this year underpinned by both weak demand-pull and cost-push factors. Subdued but stable
inflation will not obstruct the government's goal of joining the eurozone by 2015.
TABLE: INFLATION 17
Balance Of Payments 18
Current Account Surplus Not To Last Long 18
We forecast Lithuania's surplus to decline to 0.9% of GDP in 2014, before narrowing to 0.1% in 2015 and flip back into a deficit of 0.2
%of GDP in 2016. Beyond this time horizon, we expect the Lithuanian economy to post modest external deficits of 0.7 % on average by
TABLE: CURENT ACOUNT 19
Chapter 3: 10-Year Forecast 21
Lithuanian Economy To 2023 21
Moderate, But Sustainable Growth Ahead 21
Although the outlook for the Lithuanian economy over the coming decade is certainly less than inspiring compared to average real GDP
growth of 7.2% between 2004-2007, we nonetheless maintain a positive view for the economy over the long term. Indeed, while growth
is unlikely to match the stellar outturns posted in the run-up to the recession, we forecast a more moderate, but sustainable 3.4% annual
average growth rate for 2017-2023.
TABLE: Long-Term Macroeconomic Forecasts 21
Chapter 4: Business Environment 23
SWOT Analysis 23
BMI Business Environment Risk Ratings 23
Business Environment Outlook 24
Institutions 24
TABLE: BMI BUSINESS AND OPERATION RISK RATINGS 24
TABLE: BMI LEGAL FRAMEWORK RATING 25
Infrastructure 26
TABLE: LABOUR FORCE QUALITY 26
TABLE: EMERGING EUROPE - ANUAL FDI INFLOWS 27
Market Outlook 28
TABLE: TRADE AND INVESTMENT RATINGS 28
Operational Risk 29
TABLE: TOP EXPORT DESTINATIONS 29
Chapter 5: BMI Global Assumptions 31
Global Outlook 31
Chinese Economy Under Pressure 31
Table: Global Assumptions 31
Table: Developed States, Real GDP GrowtH, % 32
Table: BMI VERSUS BLOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, % 32
Table : Emerging Markets , Real GDP Growt h, % 33

View This Report »

Get Industry Insights. Simply.

  • Latest reports & slideshows with insights from top research analysts
  • 24 Million searchable statistics with tables, figures & datasets
  • More than 10,000 trusted sources
24/7 Customer Support

Talk to Ahmad

+1 718 618 4302

Purchase Reports From Reputable Market Research Publishers
Global Oil and Gas Pipelines Industry Outlook to 2020 - Capacity and Capital Expenditure Forecasts with Details of All Operating and Planned Pipelines

Global Oil and Gas Pipelines Industry Outlook to 2020 - Capacity and Capital Expenditure Forecasts with Details of All Operating and Planned Pipelines

  • $ 8 000
  • Industry report
  • June 2016
  • by Global Data

Global Oil and Gas Pipelines Industry Outlook to 2020 - Capacity and Capital Expenditure Forecasts with Details of All Operating and Planned Pipelines Summary "Global Oil and Gas Pipelines Industry Outlook ...

LNG Yearbook 2016: The Ultimate Guide to Liquefied Natural Gas Infrastructure 2016-2026

LNG Yearbook 2016: The Ultimate Guide to Liquefied Natural Gas Infrastructure 2016-2026

  • $ 6 599
  • Industry report
  • May 2016
  • by Visiongain

Report Details The definitive LNG Yearbook 2016 is the ultimate reference source for the liquefied natural gas industry. The yearbook indicates that the global LNG infrastructure market including large ...

Biorefinery Technologies: Global Markets

Biorefinery Technologies: Global Markets

  • $ 6 650
  • Industry report
  • July 2016
  • by BCC Research

This BCC Research report provides a critical evaluation of the current status of commercial biorefinery markets and the ways in which recent environmental legislation and breakthroughs in technology will ...


ref:plp2014

Reportlinker.com © Copyright 2016. All rights reserved.

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.