Page 15 - Central & Southeast Outlook 2020

Rating agency Fitch, which expects GDP growth to come in at around 2.5% in 2020-2021, says there are already some signs of a slowdown as growth of retail sales slowed down slightly to 4.2% in October, and industrial production declined 2% y/y on a calendar-adjusted basis the same month.
In the medium-term, the main risks to Lithuania’s outlook at structural factors and demographics.
The labour market crisis that has afflicted countries across Central and Eastern Europe is already contributing to the incipient growth slowdown in Lithuania, and companies are investing into automation in response. "Greater investment in productivity could partially offset negative demographic trends associated with ageing and emigration,” said the EBRD.
However, in a sign that the labour crisis is easing, the European Commission points out that immigration is set to exceed emigration in the coming years. “Though the number of vacancies remains high, to some extent, workers from non-EU countries are helping to ease labour shortages, especially in the transportation and construction sectors,” it says. Unemployment is expected to remain at around 6.2%, and the labour market will remain tight, driving up wages.
In terms of sector, Lithuania has seen expansion in emerging areas such as tech and renewables.
While Lithuania hasn’t yet achieved the successes of Estonia in the tech sector, it has become something of a rising star. A Lithuanian company, Voltas IT, topped the latest Deloitte CE Fast 50 ranking of the fastest growing tech companies from the region, and Lithuania was the highest ranked country from the region on the latest Digital Quality of Life (DQL) survey published by online privacy specialist Surfshark. And Lithuania got its first tech unicorn, used clothing marketplace Vinted, in 2019.
Lithuania is looking to boost wind energy generation in particular following the adoption of the new National Energy Strategy in 2018, that has a strong emphasis on renewables. The country’s target is for renewables to make up 45% of its power mix by 2030. Among the investment plans for the sector, European Energy A/S plans to build 500 MW of wind farms at three sites in Lithuania, as reported in November.
1.6 ​Macro - Slovakia
Slovakia Key economic figures and forecasts
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