Lithuanian economy shrinks 15 pct in 2009

posted: 13 DAYS 4 HOURS AGO

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VILNIUS, Lithuania -Lithuania's economy shrank by a staggering 15 percent in 2009 due to the global recession's impact, the country's worst performance since it regained its independence in 1991.

Statistics Lithuania said Thursday the decline eased slightly in the fourth quarter, when the economy contracted 13 percent year-on-year — compared with a 14.2 percent annual fall in the third quarter and an astonishing 19.5 percent collapse in the second — suggesting the economy has hit a bottom and could be slowly recovering.

"It would be too early to talk about an end to the recession, but future expectations are good," said Tomas Andrejauskas, head of Swedbank Markets in Lithuania.

"This cold winter will increase usage of energy resources...so it is quite possible that gross domestic product will grow in the first quarter," he said.

Reinoldijus Sarkinas, chairman of Lithuania's central bank, said Thursday that economic growth in 2010 was forecast at zero.

The steep recession comes after a boom fueled by EU membership in 2004 and a tide of cheap loans that were poured into real estate and domestic consumption.

The economies of neighboring Estonia and Latvia also declined by double-digit figures in 2009, though official data has not been released.

Together the three Baltic countries are expected to post the steepest declines among the 27 EU members, with Latvia likely having the worst result.

2010-01-28 06:22:07