According to the latest Nordic Outlook published by SEB on 27 January 2026, Lithuania’s economy is expected to accelerate in 2026. The bank forecasts Lithuania’s GDP growth at 3.2% in 2026, following 2.6% in 2025, and then a slowdown to 2.1% in 2027.
A key short-term factor behind the pickup is private consumption. SEB assumes that the reform of the second-pillar pension scheme will trigger additional spending: 35% of pension fund assets are expected to be withdrawn, and 60% of the withdrawn amounts would be used to purchase goods and services. At the same time, the bank warns that after an initial “enthusiasm effect,” consumer sentiment may weaken later on. In figures, household consumption growth is projected to rise to 5.2% in 2026, before dropping sharply to 0.5% in 2027.
SEB emphasizes that despite swings in consumption, investment will remain the backbone of growth. The forecast assumes investment growth of 7.5% in 2026 (after 6.8% in 2025), with momentum easing to 2.0% in 2027. The bank points, among other factors, to a revival of corporate credit in 2025 and sustained business investment activity.
Labour-market improvements are expected to be gradual. SEB forecasts unemployment at 6.8% in 2026 and 6.7% in 2027, noting that employment growth weakened in 2025, partly due to a smaller inflow of foreign workers. Real wage growth is expected to slow, while nominal wage growth is projected at 7.7% in 2026 and 7.0% in 2027; the bank also notes that the minimum wage is set to rise by 11% in 2026.
Inflation, in SEB’s view, should be slightly lower than in 2025, but with a clear “dip” followed by renewed acceleration. Harmonised inflation (HICP) is expected at 3.3% in 2026 (after 3.4% in 2025) and 3.0% in 2027. The bank expects inflation to fall below 3% in the first quarter, and then rise again as consumption picks up. Services inflation is projected to ease only marginally (from 5.9% to 5.5%), food inflation is expected to slow, while energy price growth may accelerate, among other reasons, due to a higher VAT rate on heating energy and increases in fuel excise duties.
On the external side, SEB expects a moderate rebound in exports. After growing by 2.9% in 2025, exports are projected to grow by 3.3% in 2026 and 3.1% in 2027. The bank notes that the second half of 2025 was weaker for industry, partly due to tougher competition from China and softer exports to the United States, but improved activity in Sweden and other neighbouring countries should strengthen demand in 2026–2027. At the same time, services exports are expected to continue growing at double-digit rates, driven by the IT and financial sectors.
In the background, fiscal policy and security considerations play an important role in the outlook. SEB reports that the central government budget for 2026 envisages a deficit of 2.8% of GDP, and when advance payments for military equipment are included, the deficit rises to 5% of GDP. Defence spending is expected to reach about 5.4% of GDP in 2026, which—according to the bank—could complicate budget work for 2027 due to political disputes over the scale of the deficit.
Against other forecasts, SEB’s outlook for 2026 is moderately more optimistic. For comparison, the European Commission’s autumn 2025 forecast pointed to growth of around 3.0% for Lithuania in 2026, with a slowdown in 2027.
