LITHUANIA


The largest of the three Baltic republics of the former Soviet Union
The biggest economy among the Baltic states, generating roughly half of this region’s GDP
Most diversified industry in the Baltics

Total area: 65,200 sq km (slightly larger than Belgium, Denmark, the Netherlands, Switzerland or West Virginia)
Population:  3.0 million
Government type: Parliamentary democracy
Administrative division: 10 counties (called „apskritys“) further subdivided into 60 municipalities (called “savivaldybe”)
Capital + other major cities: Vilnius (540,000) + Kaunas (304,000), Klaipeda (157,000), Šiaulilai (106,000)
Currency: formerly litas (LTL), adopted the euro in January 2015
Languages: Lithuanian (official) 82%, Russian 8%, Polish 5.6%, other 0.9%, unspecified 3.5%
Ethnicity: Lithuanian 84.1%, Polish 6.6%, Russian 5.8%, Belarusian 1.2%, other 1.1%, unspecified 1.2%
Religion: Roman Catholic 77.2%, Russian Orthodox 4.1%, Old Believer 0.8%, Evangelical Lutheran 0.6%, Evangelical Reformist 0.2%, other 0.8%, none 6.1%, unspecified 10.1%
President: (Ms.) Dalia GRYBAUSKAITE (since 12 July 2009)
Prime Minister: (Mr.) Algirdas BUTKEVICIUS (since 22 November 2012)
Date of EU accession: 1 May 2004
mapa



KEY FEATURES

  • Lowest taxes in the EU
  • Lowest overall taxation as a percentage of GDP (26%) in the European Union
  • Global leader in laser technology
  • 90% of Lithuanians speak a second language and 30% of population are university-educated
  • Last Baltic country to adopt the euro (January 2015)

MACROECONOMIC OVERVIEW

Lithuania is an open, dynamic and fast developing country, at the geographical centre of Europe. It is an ideal location for logistics, given its position at the crossroads of western and central Europe, Nordic & Baltic region, and Russia and the CIS.


Lithuania gained membership in the World Trade Organization and joined the EU in May 2004. Despite its EU accession, Lithuania's trade with its Central and Eastern European neighbours, and Russia in particular, accounts for a significant share of total trade. The three former Soviet Baltic republics were among the hardest hit by the 2008-09 financial crisis. After a major recession, with one of the sharpest declines in real GDP across the EU in 2009, the Lithuanian economy showed a remarkable recovery. On average, real GDP grew at 4.1 % of GDP over the period 2011-2014. Initially driven by rapid export growth, the recovery increasingly relied on domestic demand. The recovery strengthened Lithuania's overall economic convergence, allowing the country to join the euro area on 1 January 2015. Strong household consumption, supported by robust real wage growth, investment and increasing exports are expected to be the main growth drivers. Risks to the forecast are tilted slightly to the downside as the recession in Russia could turn out to be more severe than expected, further hampering Lithuania's exports.



Selected economic indicators, Lithuania, 2010 - 2016

    2010 2011 2012 2013 2014 2015 2016*
GDP
Real GDP growth
%
1.6
6.0
3.8
3.5
3.0
1.6
2.8
GDP at current prices
€ bn
28.03
31.26
33.33
34.96
36.44
37.12
Foreign trade
Exports
€ bn
18.31
23.45
27.22
29.39
29.60
28.38
Imports
€ bn
18.84
24.25
26.93
28.95
28.90
28.51
Balance
€ bn
-0.53
-0.80
-0.29
0.48
0.70
-0.12
Prices
CPI - average inflation rate
%
1.2
4.1
3.2
1.2
0.2
-0.7
0.6
PPI - industry - average
%
10.3
13.8
5.0
-2.4
-4.9
-9.7
Employment
Registered unemployment
%
17.8
15.4
13.4
11.8
10.7
9.1
7.8
Average monthly gross wage
576
592
615
646
677
714
Exchange rates
LTD/USD average
2.6067
2.4540
2.6868
2.6006
2.6021
-
-
LTD/EUR average
3.4528
3.4528
3.4528
3.4528
3.4528
-
-

*2016 data - forecast
Source: Department of Statistics to the Government of the Republic of Lithuania, IMF, Eurostat, 2016



STRUCTURE OF ECONOMY - KEY SECTORS


Lithuania's well-developed industrial base includes the wood processing, chemicals, machine tools, metal processing, construction materials, biotechnology, food processing as well as light industries, including the manufacture of textiles, clothing, furniture and household appliances. Lithuania’s industry is well complemented by strong transportation and service sectors.

Manufacturing, construction, transportation, financial intermediation, and real estate ranked among the fastest growing sectors in the economy of Lithuania. Structurally, there is a gradual but consistent shift towards a knowledge-based economy with special emphasis on biotechnology (industrial and diagnostic). The major biotechnology companies and laser manufacturers (Ekspla, Šviesos Konversija) of the Baltics are concentrated in Lithuania. Also mechatronics and information technology (IT) are seen as prospective knowledge-based economy directions.


Energy Industry

As Lithuania is the only Baltic state with a nuclear power plant, the country has developed an important energy industry. It has also become an important hub for the transport of oil from the east to Western Europe due to its strategic location on the Baltic coast. Furthermore, the country has become a transit route for natural gas and the country’s energy infrastructure is currently being linked up with the other countries of Central and Eastern Europe.


Laser Technology Industry

Lithuania has established itself as a global leader in the laser technology industry with 80% of the world’s market share for high-energy pico-second lasers, and it is also the world leader in terms of ultra-fast parametric light generator production. The laser technology industry has been helped by investment in research and development and there are currently 11 science, research and development centres dedicated to research in this specific industry.


Services and ICT Industry

The services industry as a whole accounts for 61% of Lithuania’s GDP. Major companies have relocated many of their services operations to Lithuania including Barclays, CSC, SEB, Transcom, Unicall and Storebrand. In recent years Lithuania’s economy has undergone transition to become a knowledge-based and multilingual labour force. According to government statistics, 90% of Lithuanians speak a second language and 30% of the population are university-educated.


EXPORTS & IMPORTS


2015 export and import data:




Main import partners:
Russia – 16.9%
Germany – 11.5%
Poland – 10.3%
Latvia – 7.6%
Netherlands – 5.1%


Main export partners:
Russia – 13.6%
Latvia – 9.8%
Poland – 9.7%
Germany – 7.8%
Estonia – 5.3%


Lithuania external trade - 2015




See references for our track record in Lithuania.



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