Lithuania's economy, the biggest of the European Union's three Baltic states, expanded an annual 6.9% in the Q4, led by construction, according to revised figures. Retail sales rose an annual 21.7% in January on demand for vehicles.
Gross domestic product totaled 22.67 billion litai ($8.66 billion) in the three-month period, the Vilnius-based statistics office said in an e-mailed statement today. The figure exceeds the preliminary estimate of 6.6% released on January 26. Lithuania's pace of growth is more than double the 3.3% pace in the Q4 of the 13-nation euro region. Fast growth triggered accelerating inflation as consumer spending and wages soar. The European Commission rejected Lithuania's bid to adopt the euro because its inflation is too fast. Growth for all of 2006 slowed to 7.5% from 7.6% in 2005, the statistics department said.
Retail sales rose an annual 9.4% in the previous month, the Vilnius-based statistics office said today in a statement on its Web site. Rising wages and cuts in personal income tax are fueling consumer spending in the Baltic state, boosting demand for imported products such as clothes and cars as people raise their living standards to western European levels. Higher demand for imported goods widens Lithuania's current-account deficit, which was at a preliminary 12.7% in the Q4. Sales of vehicles rose the most in January, growing 47.7% in a year. (Bloomberg)