Lithuania lowers GDP growth forecast for 2025 to 2.5 pct

VILNIUS, Dec. 22 (Xinhua) -- The Bank of Lithuania has lowered the country's gross domestic product (GDP) growth forecast for this year to 2.5 percent, down from 2.7 percent projected in September, the Baltic News Service (BNS) reported on Monday.

In 2026 and 2027, the economy is expected to expand by 3.2 percent and 2.3 percent, respectively, in line with previous forecasts.

"Lithuania's economy remains on a growth path, but this process will not be consistent over the next three years and will be characterized by fluctuations," Gediminas Simkus, chairman of the board of the Bank of Lithuania, said during a presentation of the central bank's latest economic forecasts on Monday.

According to Simkus, economic growth is expected to accelerate next year due to a second-pillar pension system reform that allows people to withdraw funds, boosting private consumption.

However, he noted that the pace of GDP growth will slow in 2027, as most of the withdrawn funds are expected to have been spent by then.

Simkus also said that although inflation will remain elevated for some time, "it is expected that it will begin to fall steadily from 2027-2028." ■