"We believe the economy could contract 1.2 percent, meaning that the former baseline scenario changes by almost 4 percentage points. But, once again, I would say it's an optimistic scenario,"

the Bank of Lithuania's board chairman Vitas Vasiliauskas said on Monday.

He estimates that the economy will feel the biggest blow in the second quarter, and the country could "expect a bit more of stability" in the second half of this year.

In order to mitigate the coronavirus' negative impact on the Lithuanian economy, the Bank of Lithuania and the European Central Bank is on Monday launching additional economic stimulus measures in order to further ensure sufficient lending to the real economy.

According to Vasiliauskas, relaxed additional capital buffers, worth 187 million euros, would allow banks to provide additional 2 billion euros in loans to businesses and residents.

"We are closely monitoring the current economic situation as well as evaluating potential scenarios, and thus can already state that the Lithuanian economy is set to shrink due to the coronavirus impact. We are collaborating with the Government on the adoption of fiscal measures that should be the first and most effective aid in such a situation," Vasiliauskas was quoted as saying in a statement released by the bank today.