In its latest forecast, Danske Bank also raised its GDP growth projection for 2013 to 3.5 percent, from 3.4 percent previously.
"The eurozone will expand by a mere 0.3 percent this year. The ongoing eurozone debt crisis will also have a negative impact on the financial markets. Being an open economy, Lithuania will be inevitably adversely affected by the developments in the eurozone," Violeta Klyvienė, Danske Bank senior analyst for the Baltic countries, said in a press release.
Danske Bank expects that Lithuania's annual average inflation will reach 3.2 percent this year and will decelerate to 2.9 percent next year. This is up from the previous estimates of 2.8 percent and 2.2 percent, respectively.
"The inflation forecast has been revised upwards due to rising prices for energy resources. First of all, this is due to the situation in the oil market," Klyvienė told BNS.
Increased heating costs and a hike in electricity prices at the start of this year are also having an impact on inflation, she says, adding that similar trends are likely to continue in 2013.
Danske Bank now expects Lithuanian unemployment to reach around 13.1 percent this year and ease to 12.4 percent next year, down from the previous estimates of 13.6 and 13 percent, respectively.
Klyvienė said that the downward revision was due to the anticipated economic growth and continuing emigration.
