"We project a deficit of 2.9 percent of GDP, slightly bellow 3 percent, and what it means is that we call for very cautious (budget) execution this year to ensure that the deficit remains no higher than 3 percent," Julie Kozack, the head of a visiting IMF mission, said at a news conference on Monday after meeting with Lithuanian Prime Minister Algirdas Butkevičius.
The IMF forecasts that Lithuania's inflation will reach around 1.25 percent this year and will rise somewhat next year.
"We expect inflation at around 1.25 percent in 2013 and a little bit higher in 2014," she said.
The Fund expects that Lithuania will post GDP growth of 3.5 percent both this year and next year.
"We expect growth of 3.5 percent in both 2013 and 2014. We also expect it to be reasonably well-balanced in terms of the composition of growth between domestic sources and external sources," the IMF official said.
The IMF mission says in its concluding report that without further fiscal consolidation, Lithuania's debt will remain at the current level of 40 percent of GDP.
The Finance Ministry forecasts that the economy will expand by 3.7 percent this year and by 3.4 percent next year. The Bank of Lithuania projects growth of 2.8 percent and 3.5 percent, respectively.
The ministry expects that the country's average annual inflation will reach 1.3 percent this year and will accelerate slightly to 1.6 percent next year. The central bank forecasts 1.4 percent and 1.5 percent inflation, respectively.
Lithuania's convergence program, updated by the Finance Ministry last spring, calls for keeping the public finance deficit within 2.5 percent of GDP in 2013.
