IMF: Lithuanian economy will be the least contracted in Europe

Update of economic forecasts for the euro area

In 2021, Lithuania’s gross domestic product (GDP) growth is forecast at 4.1%.

In April, the IMF forecast that the Lithuanian economy would contract by 8.1% this year and grow by 8.2% next.

The GDP of Estonia and Latvia is expected to decline by 5.2% and 6%, respectively, and increase by 4.5% and 5.2% in 2021, according to the latest released IMF World Economic Outlook. on Tuesday.

The IMF expects 4.4% of world GDP to contract 0.8% this year. point less than previously anticipated. The euro area ali forecast alone rose 1.9 points to minus 8.3%.

World Economic Outlook forecasts that Lithuania will have an average annual inflation rate of 1.3% this year. Prices are expected to grow 0.6% in Latvia and 0.2% in Estonia.

According to IMF analysts, last year the unemployment rate in Lithuania will reach 6.3% and will rise to 8.2% this year and next year to 7.5%. Unemployment is forecast to be 9% and 8% in Latvia and 7.8% and 6.1% in Estonia.

Lithuania’s current account surplus, which will amount to 4.3% of GDP last year, is expected to grow to 7.2% this year and 4.5% next.

The eurozone economy shows 8.3%

The IMF also forecasts that the euro area economy will experience a record slowdown in 2020, but not as much as expected, and the recovery will be slow.

According to the IMF, the eurozone economy will contract 8.3% this year, a decline not seen since the Great Depression.

However, this is less than the 10.2% decline forecast in June and before the European economy started to open up in the summer months.

Since a COVID-19 vaccine has yet to be developed, the IMF has forecast that the eurozone economy will grow 5.2% weaker in 2021 than the 6% forecast in June.

Annual growth figures are also better than the EU forecast published in July, which projects that the euro area economy will contract by 8.7% in 2020.

However, the European Union was much more optimistic about 2021, forecasting growth of 6.1%.

According to the IMF, Europe will be hit the hardest in Europe, with its gross domestic product (GDP) falling 12.8% annually. Italy’s GDP will contract by 10.6% and that of France by 8.3%.

Meanwhile, German economic growth will slow to 6% this year, as demand in Asia remains subdued, according to the IMF.

The UK’s non-EU economy will contract by 9.8% in 2020 and rebound by 5.9% in 2021, the fund predicts.

The IMF also expected that failure to conclude a trade deal between the EU and the UK by December 31 would increase business spending and could disrupt long-term cross-border production deals.

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