Lithuania economy shows GDP growth amid shifting household savings

Lithuania's economy showed growth in the second quarter, with real GDP increasing by 1.7% compared to the first quarter. On an annual basis, real GDP grew by 3.3%. This growth was primarily driven by strong household consumption, supported by rising incomes, optimistic consumer expectations, and the influx of second-pillar pension funds.

Sectoral analysis indicates that manufacturing, construction, retail, wholesale, transport, and storage were the main contributors to GDP growth. Additionally, final consumption expenditure by households rose by 1.8%, while gross fixed capital formation increased by 8.4% during this period.

In contrast to the broader economic growth, individual saving behaviors shifted in September. Data from Bigbank shows that the average amount of new savings deposits decreased by approximately 29% compared to August. This decline is attributed to increased seasonal expenses, such as school supplies, education, and student relocation, as well as rising transport costs.

Lithuanian households allocate a significant portion of their budgets to essential costs; food and non-alcoholic beverages account for 18.6% of consumption expenditures, while transport accounts for 15.2%. Combined, these two categories represent nearly 34% of household spending in Lithuania, which is notably higher than the EU average of approximately 26%.