* Lithuania economy should grow again in Q4 2010
* Growth next year should be close to zero
* Euro entry in 2014 more likely than in 2012
By Simon Johnson
UMEA, Sweden, Oct 14 (Reuters) - Lithuania's recession-hit economy should return to growth at the end of next year, the country's economy minister said on Wednesday.
Lithuania is suffering its worst recession since the early 1990s, with GDP falling by more than 20 percent in the second quarter.
Most economists see Lithuania's economy shrinking massively this year and further in 2010 before bouncing back in 2011.
Banking group SEB Economy Minister Dainius Kreivys said the figure for next
year was too pessimistic. "If global markets continue in this way, the way we can see
now, in the fourth quarter next year we will see positive growth
already," he told Reuters on the sidelines of an EU conference
in northern Sweden. He said growth for the full year in 2010 would be "close to
zero". With the economy one of the worst hit by the global
financial crisis, the government has been forced to cut spending
and launch structural reforms to try to stabilise crumbling
public finances. Nevertheless, Prime Minister Andrius Kubilius has said the
public sector budget deficit would be as high as 9.5 percent of
gross domestic product this year and could exceed 9.5-10 percent
of GDP in 2010 unless there are new spending cuts. Lithuania's cabinet on Wednesday approved a draft 2010
budget with a 9.5 percent budget deficit next year, but the
prime minister still has to convince parliament to back new
austerity measures. Kreivys said the budget deficit was "huge". "That's why we are pushing hard the fiscal consolidation
programme. It is really painful, but it is inevitable," he said. Shaky public finances are a risk to Lithuania's goal of
adopting the euro as soon as possible. Prime Minister Kubilius said in a recent Reuters interview
that the country could realistically hope to adopt the single
currency at the end of 2012. Kreivys said his view was that 2014
was a more likely date.
(Editing by Stephen Nisbet)