EU Commission lowers Lithuania’s 2026 growth forecast to 3%
Baku, November 17, AZERTAC
The European Commission on Monday cut its 2026 growth forecast for Lithuania to 3%, down from the 3.1% projected in May, according to ELTA.
In its latest macroeconomic forecast released on Monday, the European Commission said Lithuania’s gross domestic product (GDP) is expected to increase by 2.4% this year and by 2.2% in 2027.
Inflation is expected to rise to 3.4% in 2025 driven by an increase in services and food prices but ease to 2.8% in 2026, restrained by lower energy prices, according to the EU’s executive arm. In 2027, inflation is forecast to stand at 2.7%.
Consumption and investment in the beginning of 2025 had a large positive effect on real GDP growth, and these factors are going to continue to play the major role in the second half of 2025 supported by increasing wages, and lower borrowing costs.
Inflation was driven by a jump in energy prices in the early months of the year, and steady increase in food and service prices.
The head of the European Commission (EC) Representation in Lithuania, Marius Vaščega, commented that the autumn economic forecast shows the Lithuanian economy remains resilient despite a challenging geopolitical environment.
He also projected that household consumption is expected to become the main driver of growth next year, supported by rising wages and withdrawals from the second-pillar pension scheme.
In its statement, the European Commission also highlighted the importance of addressing the slowdown in labour force growth as natural population decline resumes.
In 2025, the general government deficit is forecast to increase to 2.2% of GDP, up from 1.3% in 2024. Next year, the deficit is projected to widen to 2.6% of GDP, before rising further to 2.7% in 2027.
Unemployment rate is expected to decline to 6.8% in 2026 amid robust growth, and remain at the same level in 2027.
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