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Statistics Lithuania has reported that in the second quarter of 2022, compared with the first quarter, the real GDP change was negative and stood at minus 0.4%. According to Chief Economist at Luminor Bank Žygimantas Mauricas, this is an indication that the country’s economy may face a recession in the autumn.
Žygimantas Mauricas
Žygimantas Mauricas
© DELFI / Karolina Pansevič

“The result means that we have a technical recession already. Negative growth is unavoidable in the third quarter, too. When third-quarter results are published at the end of October, we will be able to officially announce a recession,” Mauricas said on Monday in an interview on the radio Žinių Radijas.

Nevertheless, the economist believes that despite negative GDP growth two quarters in a row, the annual result would still be positive.
“Growth should be between 1% and 1.8% because the first half of the year was very good. In the first quarter, annual growth exceeded 4%, in the second quarter it was 2.8%,” said Mauricas.

According to him, the annual negative GDP growth is possible only if Lithuania’s economy experiences a significant decline.

However, he says this time the economy does not face the same financial crisis scenario as in 2008 because at the time one of the biggest GDP slumps in history was observed.

The expert argues that Lithuania is capable of withstanding an economic downturn as its economy is more diversified now, whereas residents, companies and even public institutions are not much indebted compared with the European and global average.

Mauricas forecast that Lithuania’s economy would decline at a similar rate as the EU average or slightly more due to the factor of Russia.

Elta EN
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