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Photo by Judita Grigelyts (V)
Swedbank lowered Lithuania’s GDP growth forecast for 2021 from 4% to 2.7%, but raised it to 4.7% (from 4.2%) in 2022. Economic growth outlook.
Added to N. Maiulis’ comments on growth prospects and geopolitical risks in the euro area
2020 calculations unchanged: Lithuania’s GDP fell 1.7% last year, according to Swedbank’s economic forecast revision released on Tuesday.
The forecast indicates that in 2020, at the beginning of the pandemic, the Lithuanian economy contracted less in the Baltic States. Last year, the GDP of Latvia and Estonia fell 4.5% and 2.7%, respectively.
Latvia in 2021-2022 GDP growth of 2.8% and 5% and economic growth of 3.1% and 4.3% are forecast in Estonia.
[infogram id=”108af80c-f2e8-4f89-b966-fde7a8feeea4″ prefix=”2e0″ format=”interactive” title=”Skirtingos BVP prognozs 2021 01 20″]The virus will recede in the second trimester.
Swedbank economists based their forecasts on macroeconomic indicators based on the assumption that the spread of the virus will slow significantly in the second quarter of the year, which will allow the lifting of many restrictions on economic activity and mobility.
Several factors are expected to stop the spread of the virus. In particular, an increasing proportion of the public will have immunity, both after COVID-19 and after vaccination. Seasonal factors will also be important, as last year’s experience shows, with the virus spreading later in the spring and summer.
We still cannot say with confidence that a pandemic will soon be a thing of the past. Mutations of the virus, logistical vaccinations, or the reluctance of a large part of the public to vaccinate can delay the development of mass immunity. This will undermine the aspirations of residents and businesses and further push business sectors dependent on tourism, quotes Nerijus Maiulis, chief economist at Swedbank.
The economist points out that many of the geopolitical risks have been offset by US protectionist policies, at least for a short time, and Brexit has been without drama, as free trade was agreed at the last minute. However, it is expected to remain between China and the United States and Western European countries will remain.
Swedbank economists do not change their forecast for global GDP growth for the previous year to 3.4%, which is expected to remain unchanged in 2022.
The eurozone economy is expected to grow 3.5% this year, and Italy, France and Spain, the countries that depend on tourism and suffered the most last year, are expected to enjoy even faster economic growth of more 4%. comments N. Maiulis.
[infogram id=”c08ab0b0-1eab-407b-83d6-b9403a22adad” prefix=”vSC” format=”interactive” title=”Makroekonomikos prognozs: Swedbankas”]
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