Lithuania's third-quarter GDP exceeds expectations

Oct 27, 2009, 12:44 GMT

   Vilnius - Lithuania registered a 14.3-per-cent fall in gross domestic product (GDP) in the third quarter compared to the year-ago period, but a quarter-to-quarter GDP increase of 13 per cent raised hope Tuesday that the worst of the economic crisis may be over.

Preliminary data released by the national statistics office showed a third-quarter decline of 14.3 per cent against the same period in 2008. But an accompanying statistic showed a 13-per-cent GDP increase against the second quarter of 2009, raising hopes that Lithuania may

be over the worst of one of the European Union's deepest recessions.

   Most analysts had been predicting a much bigger fall in third-quarter GDP and were taken by surprise by the figures released by the national statistics office.

   Lithuanian Prime Minister Andrius Kubilius welcomed the figures but warned against complacency.

   'Improved results should not make us relax - the government intends to implement the necessary fiscal consolidation and structural reforms,' he said.

   DnB Nord Bank analyst Yekaterina Rogaka told the German Press Agency dpa that she had been predicting an 18-per-cent third-quarter year-over-year decline and that the figures provided evidence for 'cautious optimism but optimism nevertheless.'

   Seasonal factors such as a good harvest in Lithuania's important agricultural sector had provided a valuable boost, she said.

   However, Danske Bank analyst Violeta Klyviene advised against reading too much into the statistics.

   'We remain rather cautious about these first estimates,' she told dpa. Danske had been predicting a third-quarter year-over-year GDP fall of up to 25 per cent.

   She warned that the statistics may have overestimated the impact of deflation on the economy and said the figures could be revised substantially at the year-end.