OP Corporate Bank Raises Lithuania’s 2026 GDP Growth Forecast

Lithuania’s economy is gaining momentum through household spending, but OP Corporate Bank expects that boost to fade next year as exports slow.

The bank raised its forecast for Lithuania’s 2026 GDP growth from 2.6% to 3.2%. At the same time, it raised its inflation forecast for this year to 5%, up from 4.5%, and cut its 2027 growth forecast from 2.5% to 2%.

Inflation should ease to 3% next year, although that remains above the bank’s earlier forecast of 2.5%. Economists said stronger consumption is supporting the economy, while exports are losing pace. Production volumes in Lithuania have fallen after a strong start to the year.

Seasonally adjusted household consumption has nearly reached €9 billion per quarter, according to the bank. OP Corporate Bank attributed the spending to rising real household incomes, wages and withdrawals from pension funds.

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Lithuania’s economic growth has picked up, consumption is rising, although exports are slowing. Nevertheless, Lithuania has maintained the fastest growth among the Baltic states for the seventh year.

“Lithuania’s economic growth has picked up, consumption is rising, although exports are slowing,” OP Pohjola senior economist Joona Widgren said. “Nevertheless, Lithuania has maintained the fastest growth among the Baltic states for the seventh year.”

Leda Iržikevičienė, head of OP Corporate Bank’s Lithuanian branch, said households this summer spent the same share of their income on consumption as they did during the “good times” before the pandemic, between 2010 and 2020.

The bank forecasts 2026 growth of 2.5% for Latvia and 2.3% for Estonia. It expects those economies to grow by 3% and 2.5%, respectively, in 2027.

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This summer, Lithuanian residents spent as much of their income on consumption as they did during the good times before the pandemic, between 2010 and 2020.