Economic growth picks up in the fourth quarter of 2025

Economy ends 2025 on a high note: A second release showed that Lithuania's GDP expanded 3.1% on a seasonally and calendar-adjusted year-on-year basis in Q4, following 2.1% growth in the prior quarter and above the preliminary estimate of a 2.5% rise. On a calendar- and seasonally adjusted quarter-on-quarter basis, the economy grew 1.7% in Q4, following 0.3% growth in the prior quarter. In 2025 as a whole, GDP growth edged down to 2.9% from 2024’s 3.0%, remaining among the fastest in the euro area.

External sector fuels GDP growth in Q4: Relative to the previous quarter's data, the reading for exports of goods and services improved in Q4 (+5.6% on a year-on-year basis vs +3.5% in Q3). In contrast, readings worsened for private consumption (+1.2% vs +2.0% in Q3), government consumption (+1.0% vs +1.2% in Q3), fixed investment (+4.6% vs +8.0% in Q3) and imports of goods and services (+6.5% vs +9.6% in Q3).

Panelist insight: EIU analysts commented on the outlook: “Household spending growth was uneven during 2025, most likely because of the hit to sentiment from US trade policy and uncomfortably high inflation, but we expect it to return to more consistent growth in 2026 as these factors dissipate. Government consumption growth will continue as more funding is shifted to the defence sector to bolster the country's protections against Russia. Previous ECB rate cuts and efforts to equip the defence sector will help to underpin investment growth. […] The risks to this forecast are considerable. Foremost among them for Lithuania are geopolitical risks relating to Russia, but also slower than expected growth in the EU, on which Lithuania's export recovery is largely premised.”

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