Analytics, Economics, Export, GDP, Lithuania

Rimantas Rudzkis.

The economy expanded 4.8% in the fourth quarter. The statistics office will release the report at 11 a.m. on Thursday in Vilnius. Lithuania, part of the Baltic region along with Estonia and Latvia that suffered the world's deepest recession in 2009, is benefiting from rising demand for its exports that account for about two-thirds of output. Recovering domestic demand is also supporting economic growth, writes LETA/ELTA, referring to Bloomberg.

"Exports still remain the main driver," Rimantas Rudzkis, chief economist at DnB Nord Bank in Vilnius, said by phone. "What's new is recovering domestic demand. People show more optimism about their future and consume with more confidence." The Finance Ministry on March 16 raised its economic-growth forecast for this year to 5.8% from a September estimate of 2.8%. The government is betting on an export-driven expansion as growth in the rest of Europe propels shipments of Lithuanian products to record highs. Exports, which rose to a record 5.4 billion litas (2.29 billion dollars) in December, will probably grow at least 22% this year, the ministry said. Retail trade expanded an annual 20% in the first three months of the year as consumers spent more on food and clothing.

Apranga AB, the Baltic region's biggest garment retailer, said sales in Lithuania increased 4.7% in the first quarter. Industrial production, which represents about 22% of the economy, rose an annual 15.1% in the first quarter. The Orlen Lietuva refinery, the nation's biggest exporter, said crude processing grew 27% in the period from last year.

"It's not too difficult to achieve an impressive growth rate after such a painful downturn," Vilija Tauraite, an economist with SEB Bank AB, said by phone. "The blow was so strong that it may take more than 3 years to regain what's been lost within just one year of 2009."