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Lithuania's economy to grow to 3.3 percent in 2017

Staff Writer |
Lithuania's economy growth will accelerate to 3.3 percent this year, due to both increased private consumption and exports, the country's central bank said.

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The updated forecast compares to 2.6 percent projection announced by the bank this spring.

"The exports were positively influenced by the accelerated world's economy growth, while private consumption was stimulated by rapid increase of wages," said Gediminas Simkus, director of Economics and Financial Stability Service at Bank of Lithuania, according to local media.

In 2017, consumption in Lithuania should be 4.2 percent higher than in 2016, the central bank forecasts.

The anticipated growth of investments in Lithuania later this year, resulting from European Union funding, was another reason behind the improved economic projections, Simkus added.

In 2018, Lithuania's GDP growth will slow down to 2.8 percent due to slower wage rise, the bank predicts.

"The reserves for increasing wages are not unlimited," Simkus noted, adding that situation in the Lithuanian labour market is being further aggravated by deteriorating demographic situation.

The central bank predicts that the average wage growth will amount to 6.5 percent and 5.7 percent this and next year respectively.

The unemployment rate will stand at 7.3 percent this year and 7.1 percent in 2018.