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flag Lithuania Lithuania: Economic and Political Outline

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

Lithuania became independent in 1990. Since then, it has gradually moved from a centrally planned economy to a free market economy. After its independence, the country started a process of privatization aimed to liberate its economy. EU member since 2004, the country has experienced significant growth (8% annually over 10 years before the 2007-2008 crisis) and a fast modernization of its economy. Private consumption and foreign investment are the main drivers of economic growth.

Lithuania was affected by the financial crisis in 2008, even though its economy was beginning to show the signs of over-heating before the arrival of the crisis. The progress of the inflation and the trade balance deficit were already difficult to control, and the situation worsened with the arrival of the crisis. Therefore, Lithuania experienced a recession in 2009, a fact that was notably manifested by a drop in domestic demand. The GDP dropped by 16.8% in 2009 and 3% in 2010. However, Lithuania (the least affected country among the three Baltic states, due to the fact that its banking system was less exposed and its industrial sector is diversified) was the quickest country in Europe to begin to grow again, and grow very fast (5.8% in 2011 and then, in a very difficult European context, 2% in 2012). This trend was confirmed in 2013 with +3.4% and an estimation of again 3.4% in 2014. The inflow of European funds and remittances from Lithuanian citizens living abroad is adding in 2014 to the increase in consumption. Another positive sign is the increase in companies investments.

The emergency aid accorded by the European Union came along with an austerity policy and unpopular budget cuts. The unemployment rate continues to decrease (11.7% in 2013 against 14,5% in 2012). The underground economy still represents around 30% of the GDP in 2013. But the country's economic position is stronger in 2013 than before the crisis, although its budget deficit (around 3%) remains high.

Despite a lack of support amongst the population, the country has maintained its objective to enter the euro zone in 2015.

 
Main Indicators 20112012201320142015 (e)
GDP (billions USD) 43.0842.3446.5148.7251.00
GDP (Constant Prices, Annual % Change) 6.03.73.3e3.03.3
GDP per Capita (USD) 14,22814,17115e16,47617,334
General Government Balance (in % of GDP) -3.7-2.4-1.7e-1.3e-1.3
General Government Gross Debt (in % of GDP) 39.241.039.3e40.0e39.5
Inflation Rate (%) 4.13.21.2e0.31.3
Unemployment Rate (% of the Labor Force) 15.413.411.811.010.7
Current Account (billions USD) -1.59-0.100.680.450.07
Current Account (in % of GDP) -3.7-0.21.5e0.90.1

Source: IMF - World Economic Outlook Database , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

Agriculture and fishing contributes around 3.7% to the GDP. Lithuania's main agricultural products are wheat, wood, barley, potatoes, sugar beets, wine and meat (beef, mutton and pork). Nearly 9% of the active population works in agriculture.

The main industrial sectors of Lithuania are electronics, chemical products, machine tools, metal processing, construction material, household appliances, food processing and light industry (including textile), clothing and furniture.  The country is also developing oil refineries and shipyards. The industrial sector has contributed 28.3% to the GDP in 2013 and employd around 23% of the active population. 

Lastly, the services sector contributes almost 68% to the GDP and employs 68% of the active population. Information technology and communications is, within the sector, the most important contributor to the GDP.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 8.9 24.8 65.9
Value Added (in % of GDP) 3.5 27.8 68.7
Value Added (Annual % Change) -3.3 3.3 0.7

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
Euro (EUR) - Average Annual Exchange Rate For 1 USD 2.482.612.482.692.60

Source: World Bank - Last Available Data.

 
 

Learn more about Market Analyses about Lithuania on Globaltrade.net, the Directory for International Trade Service Providers.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
73.0/100
Position:
Mostly Free
World Rank:
21/178
Regional Rank:
11/43

Distribution of Economic freedom in the world
Source: 2014 Index of Economic freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
6.58
World Rank:
42/82

Source: The Economist - Business Environment Rankings 2014-2018

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Foreign trade in Lithuania has shown a deficit for many years. This can largely be explained by the fact that the country imports from Russia a large amount of gas, and its price has been increased.

Exports have increased regularly since 2008, with, in 2013 mineral products in the lead (more than 25% of the total), followed by transport and electric equipment, biotechnology, plastics, and Laser technology. Russia is the main trade partner of Lithuania. The other clients of the country in 2013 have been Latvia, Estonia, Germany, Poland, and Belorussia. In 2013, the European Union still accounted for more than 60% of total exports. 

The majority of the country's imports come from the countries members of the European Union. The main suppliers of Lithuania are Russia, Germany, Poland, Latvia and the Netherlands. The country's main imports are mineral fuels and oil, vehicles, electrical and electronic equipment and plastics.

In 2013, the countries of the European Union still accounted for more than 55% of Lithuania's total imports.

 
Foreign Trade Indicators 20092010201120122013
Imports of Goods (million USD) 18,30423,40331,77331,96935,189
Exports of Goods (million USD) 16,45420,74828,05029,64032,575
Imports of Services (million USD) 2,8322,8983,6954,1825,170
Exports of Services (million USD) 3,6404,0345,1485,8427,028
Imports of Goods and Services (Annual % Change) -28.417.6---
Exports of Goods and Services (Annual % Change) -12.716.3---
Imports of Goods and Services (in % of GDP) 55.768.878.6--
Exports of Goods and Services (in % of GDP) 54.367.877.1--
Trade Balance (million USD) -1,639-2,212-2,494-1,451-1,620
Trade Balance (Including Service) (million USD) -622-701-516401512
Foreign Trade (in % of GDP) 110.1136.7155.7--

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2013
Russia 19.8%
Latvia 10.0%
Poland 7.4%
Germany 7.2%
Estonia 5.6%
See More Countries 50.1%
Main Suppliers
(% of Imports)
2013
Russia 28.1%
Germany 10.5%
Poland 9.5%
Latvia 6.2%
Netherlands 5.3%
See More Countries 40.4%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2013
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 21.8%
Furniture and parts thereof, n.e.s. (excl. seats...Furniture and parts thereof, n.e.s. (excl. seats and medical, surgical, dental or veterinary furniture) 3.2%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 2.3%
Polyacetals, other polyethers and epoxide resins,...Polyacetals, other polyethers and epoxide resins, in primary forms; polycarbonates, alkyd resins, polyallyl esters and other polyesters, in primary forms 2.2%
Wheat and meslinWheat and meslin 1.8%
See More Products 68.7%
- bn USD of products imported in 2013
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 20.6%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 4.0%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 4.0%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 2.9%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses incl. those in the form of transdermal administration or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 2.3%
See More Products 66.1%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 
 
 

Main Services

- bn USD of services exported in 2011
59.39%
25.23%
7.38%
2.34%
2.22%
1.07%
1.02%
0.95%
0.40%
0.01%
-0.02%
- bn USD of services imported in 2011
57.52%
22.47%
8.85%
3.52%
3.17%
1.29%
0.90%
0.90%
0.55%
0.50%
0.32%

Source: Comtrade, Last Available Data

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Sources of General Economic Information

Ministries
Ministry of Economy
Ministry of Finances
Statistical Office
Department of Statistics
Central Bank
Central Bank of Lithuania
Stock Exchange
Nordic Exchange
Search Engines
Google
Search.lt
List Lithuania
Lithuania on line
Economic Portals
The Baltic Times

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Political Outline

Executive Power
The President is the chief of state and is elected by popular vote for a five-year term. He/she is also commander in chief overseeing foreign and security policy. The Prime Minister is the head of the government and is appointed by the President on approval of the Parliament (generally leader of the majority party or coalition) to serve a term of four years. The Prime Minister enjoys the executive powers which include implementation of the law in the country and running the day-to-day affairs. The Council of Ministers (cabinet) is appointed by the President on the nomination of the Prime Minister.
Legislative Power
The legislature is unicameral in Lithuania. The Parliament (called Seimas) has a single chamber and consists of 141 seats. Members of the Parliament are elected using a mixed system combining proportional and single constituencies; this means that 71 members are directly elected by popular vote, 70 are elected by proportional representation; all members serve four-year terms. A party must receive at least 5% of the national vote to be represented in the Seimas. The Prime Minister cannot dissolve the Parliament (but President can do so on recommendation of the Parliament) nor can veto its enactment .
Main Political Parties
Lithuania has a multi-party system in which a single party does not have the chance of gaining power alone. So parties work with each other to form coalition governments. Some of the major parties in the country are:
- LSDP (Social Democratic Party of Lithuania) – advocates social democracy, has communist background.
- VNDS (Peasants and New Democratic Party Union) - an agrarian-conservative political party.
- TS (Homeland Union) – a right-wing conservative political party.
- DP (Labor Party) – advocates globalization and free-market economy in entire Europe; centrist.
- Liberal Democratic Party – a right-of-centre political party.
Current Political Leaders
President: Dalia GRYBAUSKAITE (since July 2009) – non-partisan
Prime Minister: Algirdas BUTKEVICIUS (since 22 November 2012) - Lithuanian Social Democratic Party (LSDP)
Next Election Dates
Presidential: May 2019
Parliamentary: October 2016
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
32/180
Evolution:
1 place up compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Free
Political Freedom:
1/7

Map of freedom 2014
Source: Freedom House

 

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