Lithuania; the IMF verdict

December 16, 2008 at 7:36 pm 2 comments

EquallThe the International Monetary Fund (IMF) has completed its routine mission to Lithuania and delivered a verdict.  Even though its statement begins with ‘The Lithuanian economy faces challenges’ it continues by saying that ‘Bold upfront policy actions and contingency planning will help Lithuania to address these challenges’ concludes that ‘mission welcomes these (Central Bank of Lithuania) prudent measures’.

As the BNS noted Catriona Purfield, the head of a visiting IMF mission said today that Lithuania has no need to borrow money from IMF at the moment: “We do not see a need for Lithuania to borrow from the IMF. The authorities have not requested aid”.  Hence, a public message made by some politicians few weeks ago about a possible borrowing from the IMF was premature.

The IMF has also ‘lifted’ the Lithuania’s GDP growth for year 2009.  Even though this prediction could change the IMF thinks that the GDP will contract ‘only’ by 2 percent, not by 4.8 percent as the Ministry of Finance announced few days ago.  The SEB banks outlook, which was published today, has also confirmed the IMF predictions for Lithuania.

Another valuable information is that Lithuania is not planning to devaluate its currency Litas.  As the BNS mentioned Kubilius said that the fund’s representatives agreed that Lithuania did not need an IMF loan to solve the problems it could face. “Today we agreed that we are not planning and will not be planning any currency devaluation. Currently, we are not holding any consultations as to borrowing from the IMF to solve our problems,” he said.

The PM concluded that “The IMF gave positive marks to the steps we are taking and to our plans, which allows us to look to the coming year with reserved optimism,” as the BNS writes.

About 15 minutes ago the Parliament agreed to put the Budget 2009 for the discussion in the Seimas committees and in the political factions and meet on Monday to have a final reading before adopting it.  The plan is to adopt the budget before Christmas.

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Entry filed under: Baltic States, Economics, Estonia, Latvia, Lithuania, Northern Europe, Politics, Scandinavia, Sweden.

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2 Comments Add your own

  • 1. Gedimino pilis gets sold  |  December 17, 2008 at 10:30 pm

    […] a government that earlier made some noise about potentially asking the IMF for a loan. The IMF said no loan is needed, but this economic crisis provides a good setting for what had the opportunity to be a brilliant […]

    Reply
  • 2. mortgage  |  May 8, 2009 at 9:52 pm

    what is mortgage? 🙂

    Reply

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