Lithuanian GDP increases less than expected

Oct 28, 2010, 14:41 GMT

Vilnius - Lithuania's recovery from one of the deepest recessions in the European Union continued Thursday with the release of data showing an increase in gross domestic product (GDP), though at a slower rate than many analysts had expected.

Statistics Lithuania said that third-quarter GDP increased by 0.6 per cent compared to the same period last year and by 6.7 per cent compared to the second quarter of 2010.

'The weak outcome was broadly unexpected, but we already mentioned some key risks that could lead (to) this relatively poor result,' said Danske Bank's Baltic analyst, Violeta Klyviene.

'It is necessary to mention that the statistics office has revised the second-quarter results down to 1.1 per cent year-on-year from a previous 1.3 per cent,' she said.

Bad weather conditions negatively affected the agricultural outcome and positive industry results were partially offset by declines in construction, retail trade and agriculture activities, Klyviene said.

'Industrial recovery is gaining momentum but is still not sustainable. Consequently, retail trade remains weak - it is logical to see relatively weak GDP results,' she said.

The Lithuanian Finance Ministry said the figures were no cause for concern and that Lithuania's recovery from a 15-per-cent GDP contraction in 2009 would continue.

'Third quarter-data did not confirm the expected strong recovery in investment, but ... it is only a matter of time,' a statement from the ministry said.