The recently published July 2011 report by the Lithuanian Free Market Institute (LFMI) states that the Lithuanian GDP will grow during 2011 by 4.9% and 4.6% in 2012. Unemployment will diminish at a slow rate staying at 14.6% for 2011 and reducing to 12.8% for 2012.
Household income is expected to grow at a faster rate than consumer prices there for increasing purchasing power. Average net earnings are predicted to rise by 4% through 2011 and 5% in 2012. The price of borrowing which has been marginally lower in 2011 compared to 2010 will rise in 2012; exact figures are dependant on the European Central Bank’s increases on interest.
Company profit margins are predicted to be an average of 4.7% in 2011 and 5.3% in 2012. Exports have been a very strong input to the Lithuanian economy with a growth of 17% in 2011 and expected 14% growth in 2012.
Interestingly Lithuania’s shadow economy represents 29% of GDP in 2011 and this is expected to remain pretty much the same for 2012 at 27%. The LFMI reports that 45% of businesses were to some extent or other partially involved in underground trading during 2011.
