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VILNIUS, Oct 27, BNS - Lithuania's GDP results for the third quarter have exceeded market expectations and give a glimmer of hope that the annual decline this year will be smaller than projected, analysts believe. "The first impression is very good since the rate has exceeded the expectations of all market players. The result of 14.3 percent would truly seem not too bad.

 Moreover, the second quarter estimate has been revised up," Vilija Tauraite, chief analyst with Lithuania's SEB bank, told BNS. "The results have surprised in the most positive way - third-quarter growth compared with the second quarter is really impressive although such rates could not have been expected based on retail figures," Violeta Klyviene, chief Baltic analyst at Danske Bank, told BNS.

Lithuania's gross domestic product (GDP) contracted by 14.3 percent in the third quarter of this year compared with the respective period of 2008. The estimate of annual decline in the second quarter was revised up to 19.5 percent, from 20.4 percent, the Statistics Department reported earlier on Tuesday.

In the third quarter the country's economy expanded by 13 percent versus the second quarter, while the seasonally-adjusted rise was 6 percent, it said.

Klyviene would not forecast what GDP results could be expected in the final quarter, although said that full-year decline could reach 15-16 percent. Danske Bank analysts projected an approximately 20 percent full-year economic decline for Lithuania in mid-September.

"SEB bank forecasts a 15.5 percent [decline for full 2009]. The latest data turn this forecast into rather cautious although three or four months ago it seemed rather optimistic," Tauraite said.

The annual decline in the final quarter of 2009 could be smaller - of some 10-11 percent, she added. "We believe that the GDP decline will continue to slow down, which will also be the case in 2010. However, the slowdown of decline will not besharp, yet the situation will continue to improve," Tauraite said.

The Finance Ministry projects a 18.2 percent economic contraction in Lithuania this year.