The GDP growth in Lithuania declined for the second consequent quarter. In the third quarter of 2016, real GDP increased by 1.7% as compared to the corresponding period of the previous year or by 0.1% as compared to the previous quarter (seasonally adjusted).
The economic growth, as in the previous quarter, was supported by the household consumption and exports of goods and services. The main factors behind the growth in household consumption were related to the positive wage growth, increasing number of employees and credit growth. The main restricting factor was decline in gross fixed capital formation, largely related to the slower than expected absorption of the funds from the new EU financial framework 2014-2020 and the related decline in construction.
The highest growth of gross value added was in wholesale and retail trade, repair of motor vehicles and motorcycles, transportation and storage, accommodation and food service activities.
The investment is tangible fixed assets continued to decline. In the third quarter of 2016, the investment in tangible assets amounted to 1.43 billion and declined by 6.2%as compared to the corresponding period of the previous year., The investment in the construction of buildings and civil engineering structures decreased by 164 million Eur or 34% due to the lower EU funds flow percent. On the positive side, investments flow in machinery, equipment and vehicles increased by 5.6% or 31.5 million Eur, mostly driven by the private sector investment.
The unemployment rate, especially youth, continued to decline despite economic slowdown. In the third quarter of 2006, the unemployment rate fell by 0.5 percentage points and reached 7.5%. At the same time, youth unemployment rate has dropped by 2.6 percentage points to 13.1% and long-term unemployment rate decreased by 0.3 percentage points 2.8%. The total number of unemployed in the third quarter of 2016 as compared to the corresponding period of the previous year declined by 9.4 percent to 111 thousand. The employment growth mostly occurred in the private sector, in particular in wholesale and retail sectors, manufacturing and construction sectors.
Exports of goods declined in the light of volatile external environment. In the third quarter of 2016, as compared to the corresponding period of the previous year, the value of exports of goods decreased by 2.5% to €5.71 billion. The decline was strongly influenced by the lower prices of exports of refined petroleum products exports as well as decrease in re-exports. At the same time, the exports of Lithuanian origin, energy products excluded, increased by 2.3 percent.
The growth of industrial production in the third quarter has returned to the positive territory. In the third quarter of 2016, as compared to the corresponding period of the previous year, industrial production increased by 0.2% to €4.6 billion. Without refined oil products, industrial production grew by €120 million to €3.8 billion. The growth has been driven by the pharmaceuticals, chemistry and food industries.
The construction sector continued to decline for the fifth consecutive quarter. In the third quarter of 2016 as compared to the corresponding period of the previous year the volume of construction works carried out within the country fell by 11.3% and amounted to €0.66 billion. The main negative factor was a slump in the investments of public sector, suffered from the EU structural fund planning period changeover.
The retail trade growth continued strong performance. In the third quarter of 2016, income of retail trade rose by 6.9% and reached €2.49 billion at current prices. This growth was one of the highest in the EU after Luxembourg, Romania and Poland.