FX.co ★ Lithuania Economy Slows to 2-Year Low

Lithuania’s economy contracted by 0.3% quarter-on-quarter in the first quarter of 2026, following a 1.9% expansion in the previous three months and coming in slightly better than the initial estimate of a 0.4% decline. This was the first quarterly downturn since the fourth quarter of 2023.

The contraction was driven primarily by weaker activity in several key sectors. Construction output fell by 1.7%, compared with a 1.3% increase in Q4 2025. Trade-related services declined by 1.1% after rising 1.9% in the prior quarter, while information and communications dropped 0.5% following a 2.6% gain. Financial and insurance activities also decreased by 1.9%, reversing a 3.2% increase in the previous period. At the same time, manufacturing stalled (0.0% vs 1.5%), and growth in real estate activities slowed to 0.3% from 1.6%.

From the expenditure perspective, gross fixed capital formation fell sharply by 4.4%, after growing 3.4% in Q4 2025. In contrast, household consumption strengthened, rising 1.0% compared with 0.6% previously, and government spending increased 0.9% after a 0.3% decline. Net external demand also detracted from growth: exports slipped 0.1% following a 1.2% rise, while imports rebounded, growing 0.3% after a 0.1% decline.

On a year-on-year basis, GDP expanded by 2.3% in the first quarter of 2026, easing from 3.3% growth in the previous quarter.