Lithuania economy in precarious position

Country:  Lithuania

28 May 2009

Prime Minister Andrius Kubilius has owned up to the fact that the recession in Lithuania could be worst than initially projected by the government forecast, according to a Bloomberg report.

The Lithuanian property market has suffered amid an astonishing economic slump. Property prices in the capital of Vinius have depreciated by around 30% over the past year, while the country’s economy contracted a preliminary 12.6% in Q1 2009.

Lithuania’s economic decline is the third-deepest in the European Union after Latvia, whose gross domestic product shrank 18% in the same period, and Estonia, whose GDP slumped an annual 15.6%.

Lithuania’s Finance Ministry forecasts that the economy will shrink by 10.5% this year, while the central bank estimates that GDP may contract 15.6% on shrinking domestic demand and lower exports.

Look out for the feature on the Baltic property market in the next issue of Homes Overseas magazine, out in a fortnight. If you would like to subscribe, please click here.

See Also:   Lithuania