29 Apr 2009

Economy of Lithuania shrinks 12%

8:54 am on 29 April 2009

The economy of Lithuania shrank by 12.6% in the first quarter of 2009 compared with the same period last year.

The national statistics office said the decline was due to falling industrial output, lower demand for exported goods and a lack of credit.

It is the largest contraction in gross domestic product since Lithuania started official records in 1995.

Lithuania has forecast a contraction in GDP of 10.5% for the whole of this year.

The economy previously grew by 8.9% in 2007, which was a record increase for the small Baltic state, but last year growth had slowed to 3%.

Lithuania joined the EU in 2004. The economies of two other Baltic states in the EU, Latvia and Estonia, are also shrinking.

Estonia's central bank has forecast that the economy there will shrink by 12% this year.

Latvia's Finance Ministry has predicted the country's GDP will contract by 15% in 2009.