Lithuanian Free Market Institute Reports GDP Growth for 2011 and 2012

The recently published July 2011 report by the Lithuanian Free Market Institute (LFMI) states that the Lithuanian GDP will grow during 2011 by 4.9% and 4.6% in 2012. Unemployment will diminish at a slow rate staying at 14.6% for 2011 and reducing to 12.8% for 2012.

Household income is expected to grow at a faster rate than consumer prices there for increasing purchasing power. Average net earnings are predicted to rise by 4% through 2011 and 5% in 2012. The price of borrowing which has been marginally lower in 2011 compared to 2010 will rise in 2012; exact figures are dependant on the European Central Bank’s increases on interest.

Company profit margins are predicted to be an average of 4.7% in 2011 and 5.3% in 2012. Exports have been a very strong input to the Lithuanian economy with a growth of 17% in 2011 and expected 14% growth in 2012.

Interestingly Lithuania’s shadow economy represents 29% of GDP in 2011 and this is expected to remain pretty much the same for 2012 at 27%. The LFMI reports that 45% of businesses were to some extent or other partially involved in underground trading during 2011.

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