Lithuania Economy Slows to 2-Year Low

2026-06-01 06:50 By Erika Ordonez 1 min. read

Lithuania’s economy shrank by 0.3% quarter-on-quarter in the first quarter of 2026, reversing from a 1.9% expansion in the previous three-month period and coming in slightly above preliminary estimates of a 0.4% decline.

This marked the first quarterly contraction since the fourth quarter of 2023, driven by declines in construction (-1.7% vs 1.3% in Q4 2025), trade-related services (-1.1% vs 1.9%), information and communications (-0.5% vs 2.6%), and financial and insurance activities (-1.9% vs 3.2%), alongside weaker manufacturing (0.0% vs 1.5%) and real estate activities (0.3% vs 1.6%).

On the expenditure side, gross fixed capital formation declined (-4.4% vs 3.4%), while household consumption (1.0% vs 0.6%) and government spending (0.9% vs -0.3%) improved.

Net external demand also weighed on growth, as exports (-0.1% vs 1.2%) declined while imports (0.3% vs -0.1%) rebounded.

On an annual basis, GDP grew 2.3% in the first quarter of 2026, slowing from 3.3% in the previous period.



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Lithuania Economy Slows to 2-Year Low
Lithuania’s economy shrank by 0.3% quarter-on-quarter in the first quarter of 2026, reversing from a 1.9% expansion in the previous three-month period and coming in slightly above preliminary estimates of a 0.4% decline. This marked the first quarterly contraction since the fourth quarter of 2023, driven by declines in construction (-1.7% vs 1.3% in Q4 2025), trade-related services (-1.1% vs 1.9%), information and communications (-0.5% vs 2.6%), and financial and insurance activities (-1.9% vs 3.2%), alongside weaker manufacturing (0.0% vs 1.5%) and real estate activities (0.3% vs 1.6%). On the expenditure side, gross fixed capital formation declined (-4.4% vs 3.4%), while household consumption (1.0% vs 0.6%) and government spending (0.9% vs -0.3%) improved. Net external demand also weighed on growth, as exports (-0.1% vs 1.2%) declined while imports (0.3% vs -0.1%) rebounded. On an annual basis, GDP grew 2.3% in the first quarter of 2026, slowing from 3.3% in the previous period.
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