IMF Staff Country Reports

Republic of Lithuania: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Lithuania

Publication Date:

September 5, 2023

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

The strong post-pandemic recovery led to demand driven inflationary pressures. Supply side bottlenecks and large increases in commodity prices after Russia’s invasion of Ukraine compounded these pressures and resulted in high and persistent inflation. The negative impact on disposable income, higher interest rates and weaker external demand have led to a deterioration of economic activity. If high inflation becomes entrenched, it will erode competitiveness and slow the successful convergence process. The financial system has ample liquidity and capital buffers to address the weakening economic cycle. Higher interest rates have boosted banks’ profitability, but they also bring significant risks.

Series:

Country Report No. 2023/316

Subject:

Financial institutions Fiscal policy Fiscal stance Inflation International organization Labor Labor markets Loans Monetary policy Prices Real estate prices

Frequency:

regular