The central bank forecasts that next year, the economy will expand by 3.4 percent, 0.1 percentage points lower than it projected in May.
"With forecasts for a slowdown in the country's foreign trade growth having proved correct and consumers and producers continuing to lack optimism, the Bank of Lithuania is keeping its real GDP projections for 2012 and 2013 basically unchanged," it said in a press release on Friday.
"One of Lithuania's key export markets, the eurozone, is teetering on the brink of recession. Therefore, growth in our producers' exports has been decelerating. We predict that demand for export goods and services will increase at a slower pace in the coming quarters and, therefore, domestic demand will continue to have the relatively greatest impact on economic growth," Ruta Rodzko, the director of the central bank's Economics And Financial Stability Service, was quoted as saying in the press release.
“Stronger recovery of consumption is hindered by consumer expectations that are worse than last year due to unclear situation in the global economy and gradual, uncertain recovery of Lithuania’s labor market,” she said.
Employment is projected to increase by 1.4 percent in 2012 and by 1.5 percent in 2013, up slightly from the central bank's 1.1 percent and 1.4 percent forecasts in May.
The projection for this year’s unemployment rate was revised down to 13.4 percent, from 13.7 percent forecast in May. Next year, the jobless rate is expected to go down to 11.9 percent (down from 12.2 pct projected in May).
Average wages should increase by 3.1 percent this year and by 2.9 percent next year, up from 2.3 percent and 2.6 percent, respectively, projected in May.
Current account deficit is projected to reach 3.1 percent of GDP this year (up from 3 pct projected in May) before going up to 3.5 percent in 2013 (up from 3.3 pct).
The central bank is sticking to its inflation forecast of 2.9 percent this year. It expects inflation to ease to 2.4 percent next year, down from its previous forecast of 2.7 percent.
