BAKU, Azerbaijan, September 26. Lithuania’s economy expanded strongly in 2024, with real GDP rising 2.8 percent as household consumption recovered and services exports rebounded, Trend reports.
Growth momentum carried into the first half of 2025, when GDP increased 3.2 percent year-on-year, supported by higher public investment in energy, transport, and defense despite a slowdown in manufacturing.
According to the European Bank for Reconstruction and Development (EBRD), fixed investment rose by 8.7 percent in the first half of 2025, driven by EU-funded infrastructure projects, including Rail Baltica, as well as stepped-up defense procurement ahead of Recovery and Resilience Facility (RRF) deadlines in mid-2026.
These investments helped to balance the scales against weaker external demand and rising labor costs that were dragging down manufacturing.
Fiscal pressures, however, remain a concern. Lithuania’s deficit reached 5.3 percent of GDP in 2024 and is projected at 5.2 percent in 2025, well above EU thresholds, with public debt now surpassing 60 percent of GDP. The national budget council has warned that additional fiscal measures worth 2 percent of GDP will be required by 2027 to restore stability.
Looking ahead, growth is set to taper off, with forecasts coming in at 1.1 percent in 2025 and 1.6 percent in 2026. Analysts caution that risks are tilted to the downside due to ongoing trade frictions, tighter fiscal policies, and weak demand within the European Union. On the upside, stronger real wage growth and the timely delivery of EU-funded projects could provide a welcome boost to Lithuania’s economy.
Stay up-to-date with more news on Trend News Agency's WhatsApp channel