The IMF forecasts that the country's GDP will grow by 2.7% this year and 2.9% next year, which is 0.2 and 0.5 percentage points lower than the September forecasts.
Prices will rise slightly faster than previously forecast: headline inflation will reach 3.6% this year and 3.1% next year (0.4 percentage points higher). The unemployment rate, which reached 7.1% last year, is expected to fall to 6.6% this year and 6.1% next year.
„Although the negative impact of trade tariffs on the global economy is gradually intensifying, Lithuania remains resistant to these trends. Our economy is one of the fastest-growing in the European Union. However, we cannot rest on our laurels,“ said Gediminas Šimkus, Chairman of the Board of the Bank of Lithuania, in a statement.
According to him, Lithuania must continue to strengthen its financial and capital markets so that businesses have more opportunities to invest and increase productivity.
The IMF estimates that the introduction of US trade tariffs will dampen global economic growth, but by less than forecast in April, as the tariffs are lower than expected at that time.
Global economic activity remained strong in the first half of this year, with consumers and businesses bringing forward their consumption and investment and increasing inventory accumulation to meet orders before the tariffs took effect.
The IMF estimates that global GDP will grow by 3.2% this year and 3.1% next year. (This is 0.4 and 0.1 percentage points higher than in the spring forecasts, respectively).
Global price growth is expected to continue to slow, falling from 2.6% last year to 2.5% this year and 2.2% next year in developed countries.
According to IMF analysts, tariffs will reduce international trade growth in the medium term – after growing by 3.5% last year, global trade volumes will increase by 3.6% this year due to front-loaded consumption, but growth will slow to 2.2% next year.
The effective US tariff rate on goods from the rest of the world, which stood at 23% in May, has now fallen to 16% due to bilateral trade agreements. The rest of the world's retaliatory measures against the US have been minimal so far, so the effective tariff rate on US exports has remained virtually unchanged compared to 2024.
Economic growth in the Eurozone remains weak, but will pick up slightly this year. After growing by 0.9% last year, euro area GDP is expected to grow by 1.2% this year (0.4 percentage points more) and at its potential rate of 1.1% next year (0.1 percentage points less). Inflation is returning to the European Central Bank's (ECB) target level: after reaching 2.4% last year, it will be 2.1% this year.
Inflation is returning to the European Central Bank's (ECB) target: after reaching 2.4% last year, it will be 2.1% this year and 1.9% next year.
LB Board Chairman Gediminas Šimkus and his deputy Julita Varanauskienė will attend the IMF annual meetings in Washington this week to discuss the main risks to the global, euro area, and Lithuanian economies, as well as the importance of the new IMF program for Ukraine, which the country's government has applied for.
The IMF is an organisation that brings together 191 countries. The Fund seeks to promote sustainable economic growth and prosperity for all its members. Lithuania has been a member of the IMF since 1992 and is represented by the Head of the Central Bank.