Economy review

Real GDP growth slightly increased. In the second quarter of 2013 the GDP grew by 3.8% as compared with the corresponding period of the previous year. Economic sentiment indicator (ESI) is still growing and reached 6 points in June 2013, which was 6.9 points above its long-term average by.

Annual rate of change in household consumption was 4.9% in the period under review due to monthly earnings growth, reduced unemployment and better expectations. The Consumer Confidence Index was improved from -15 points to -8 points at the end of the period compared to the corresponding period of the last year and it can be expected to continue growing due to the expected increase in earnings.

General government consumption expenditure has been growing for eight consecutive quarters. In the period under review, compared to the second quarter of 2012, public spending grew by 1.2% to €1.0 billion. However, growth in public spending is limited by strict fiscal consolidation rules set by the regulations of Lithuania and the European Union.

Exports of goods and services increased by 11.8% (at current prices), despite uncertainty in the euro zone and negative changes in the Russian economy. Increase in export of mineral products (major of them are fuels for transport vehicles) had the biggest positive impact on annual rate of change in export in the quarter under review. Import of goods and services grew by 12.3%. The balance of goods and services as a percentage of the GDP fell to 1.97% in the second quarter of 2013 from 2.16% a year ago.

Gross fixed capital formation increased by 12.1% to €1.3 billion and also contributed to the annual growth of the economy. Annual rate of change in material investments in transport equipment, other machinery and equipment increased by 9.1%, while investments in other building and structures grew by 10.6%, dwellings – by 2.8%.

In the second quarter of 2013 the unemployment rate fell to 11.7% from 13.1% in the first quarter. The indicator was 13.2% in the second quarter of 2012. The youth unemployment rate decreased from 22.7% to 21%, while in the previous year it was 24.7%. The long term unemployment dropped to 4.9%, which is the lowest rate in the post-crisis period. The number of employees increased by 2.4% compared with previous quarter, mainly due to seasonal factors. The number of employees increased by 0.8% to 1297 thousand, as compared with the same period of 2012.

Annual growth of industrial output has achieved its highest rates in two years. In the period under review industrial output increased by 9.3%, while  production in manufacturing (it amounts 86% of total industry production) increased by 10.4% as compared to the corresponding period of the previous year   Except for the refined petroleum products, manufacturing output rose by 4.7%. It gave new evidence of further growth of economy despite the negative performance in the markets of the main trading partners. Lithuania’s industry production amounted to €4.9 billion (without refined oil products – €3.6 billion) over the period under review. In the second quarter of 2013, Industry confidence index grew by 4 points to 3 points.

Second quarter cargo traffic decreased. Negative performances outside the country caused fall in some sub-sectors of transportation. In the second quarter, compared to the same period of 2012, handled cargo by rail transport decreased by 6.1%, the turnover of the port of Klaipeda and Butinge terminal fell by 0.7%, air transport – -3.6%. In the period under review annual growth of retail trade accelerated to 5.1% from the 3% in the previous quarter.

ukmin.lt