BAKU, Azerbaijan, September 26. Lithuania’s
economy expanded strongly in 2024, with real GDP rising 2.8 percent
as household consumption recovered and services exports rebounded,
Trend
reports.
Growth momentum carried into the first half of 2025, when GDP
increased 3.2 percent year-on-year, supported by higher public
investment in energy, transport, and defense despite a slowdown in
manufacturing.
According to the European Bank for Reconstruction and
Development (EBRD), fixed investment rose by 8.7 percent in the
first half of 2025, driven by EU-funded infrastructure projects,
including Rail Baltica, as well as stepped-up defense procurement
ahead of Recovery and Resilience Facility (RRF) deadlines in
mid-2026.
These investments helped to balance the scales against weaker
external demand and rising labor costs that were dragging down
manufacturing.
Fiscal pressures, however, remain a concern. Lithuania’s deficit
reached 5.3 percent of GDP in 2024 and is projected at 5.2 percent
in 2025, well above EU thresholds, with public debt now surpassing
60 percent of GDP. The national budget council has warned that
additional fiscal measures worth 2 percent of GDP will be required
by 2027 to restore stability.
Looking ahead, growth is set to taper off, with forecasts coming
in at 1.1 percent in 2025 and 1.6 percent in 2026. Analysts caution
that risks are tilted to the downside due to ongoing trade
frictions, tighter fiscal policies, and weak demand within the
European Union. On the upside, stronger real wage growth and the
timely delivery of EU-funded projects could provide a welcome boost
to Lithuania’s economy.
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