Experts suspect that Lithuania’s households are tightening the purse strings and spend the money earned in shadow economy.
Remittances by Lithuania’s emigrants, which have been falling for two consecutive years, contracted by 26.5 percent, year-on-year, to 89 million litas (EUR 25.8m) between January and March. The amount of remittances was the smallest from the first quarter of 2006, Rokas Bancevičius, senior analyst with DNB bank, told the daily.
The analysts point out that domestic consumption made a solid contribution to the growth of gross domestic product (GDP), which increased by 2.1 percent in the second quarter of this year from the same period last year. The retail turnover, excluding the sale of motor vehicles, actually increased by 4 percent between April and June versus the same period of 2011.
“All this leads to the conclusion that the growth of consumption is fueled by money earned in shadow economy,” Bancevičius said.
Violeta Klyvienė, senior analyst for the Baltic countries at Danske bank, believes that a decline in remittances from abroad results from economic difficulties in the countries with the largest communities of Lithuania’s emigrants.
