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flag Lithuania Lithuania: Economic and Political Outline

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. In recent years, the economy has had strong growth (an average of 8%). Private consumption and foreign investments are the main economic growth drivers.

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 had a drop of 16.8% in 2009 and 3% in 2010, but it seems to be rising again slowly.  However, Lithuania appears to be 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. The emergency aid accorded by the European Union came along with an austerity policy and unpopular budget cuts.  The unemployment rate affects more than 15% of the active population, the underground economy increased to around 30% of the GDP. Lithuania's foreign debt rose to 29.3% of its GDP in 2009.  The revival is on its way, inflation was rapidly controlled and the exports have picked up again.

 
Main Indicators 2009201020112012 (e)2013 (e)
GDP (billions USD) 36.9236.3743.17e46.0148.82
GDP (Constant Prices, Annual % Change) -14.71.3e6.0e3.43.6
GDP per Capita (USD) 11,05611,046e13,19014,14215,096
General Government Balance (in % of GDP) -6.3-5.5e-4.9-4.5-3.9
General Government Gross Debt (in % of GDP) 29.638.742.844.645.9
Inflation Rate (%) 4.21.2e4.22.62.5
Unemployment Rate (% of the Labor Force) 13.717.815.514.012.0
Current Account (billions USD) 1.650.67-0.80-1.26-1.76
Current Account (in % of GDP) 4.51.8e-1.9e-3.6-

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

Note: (e) Estimated Data

Main Sectors of Industry

Agriculture contributes around 3.6% to the GDP. Lithuania's main agricultural products are wheat, wood, barley, potatoes, sugar beets, wine and meat (beef, mutton and pork). Nearly 7.7% 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 contributes 30% to the GDP and employs 30% of the active population. 

Lastly, the services sector contributes almost 60% to the GDP, and the sector of information technology and communications is the most important.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 9.2 26.8 63.6
Value Added (in % of GDP) 3.5 28.2 68.3
Value Added (Annual % Change) 1.8 3.3 -12.5

Source: World Bank - Last Available Data.

 
 
Monetary Indicators 20062007200820092010
Lithuanian Litus (LTL) - Average Annual Exchange Rate For 1 USD 2.752.522.362.482.61

Source: World Bank - Last Available Data.

 
 
Learn more about Market Analysis about Lithuania on Globaltrade.net, the Directory for International Trade Services.
 

Indicator of Economic Freedom

Score:
71.3/100
Position:
Mostly free
World Rank:
24/179
Regional Rank:
13/42

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

 

Country Risk

See the Country Risk Analysis Provided By Ducroire.

 

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Foreign Trade in Figures

Since several years ago, foreign trade in Lithuania has shown a deficit.  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.

In 2008, exports increased almost 28%, a trend that was confirmed again in 2009 and 2010, with mineral products in the lead (more than 24% of the total), followed by transport and electric equipment (10.2%), biotechnology (7.9%), plastics, and Laser technology.  Russia is the main trade partner of Lithuania.  The other clients of the country are Latvia, Germany and Poland.  The European Union accounts for 64% of total exports in 2009. 

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, the Netherlands and Latvia.  The country main imports are mineral fuels and oil (33%), vehicles, electrical and electronic equipment (12%) and plastics (11%).  In 2009, the countries of the European Union accounted for almost 58% of Lithuania's total imports.

 
Foreign Trade Indicators 20062007200820092010
Imports of Goods (million USD) 19,37324,41231,09818,30423,277
Exports of Goods (million USD) 14,14217,14423,64616,45420,819
Imports of Services (million USD) 2,4543,2714,2062,8322,775
Exports of Services (million USD) 3,5713,9674,7833,6403,841
Imports of Goods and Services (Annual % Change) 13.710.710.3-28.417.6
Exports of Goods and Services (Annual % Change) 12.03.011.6-12.716.3
Imports of Goods and Services (in % of GDP) 69.367.471.756.169.6
Exports of Goods and Services (in % of GDP) 59.154.159.954.668.2
Trade Balance (million USD) -4,209-5,874-6,207-1,154-1,560
Trade Balance (Including Service) (million USD) -3,126-5,242-5,640-427-264
Foreign Trade (in % of GDP) 128.3121.5131.6110.7137.8

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

 

Main Partner Countries

Main Customers
(% of Exports)
2010
Russia 15.6%
Germany 9.8%
Latvia 9.5%
Poland 7.7%
Netherlands 5.5%
See More Countries 51.8%
Main Suppliers
(% of Imports)
2010
Russia 32.7%
Germany 10.9%
Poland 8.8%
Latvia 6.3%
Netherlands 4.4%
See More Countries 36.9%

Source: Comtrade, Last Available Data

 

Main Products

Main Exports
(% of Exports)
2010
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 21.7%
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) 3.3%
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) 3.1%
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 3.1%
Mineral or chemical fertilizers containing two or...Mineral or chemical fertilizers containing two or three of the fertilizing elements nitrogen, phosphorus and potassium; other fertilizers (excl. pure animal or vegetable fertilizers or mineral or chemical nitrogenous, phosphatic or potassic fertilizers); animal, vegetable, mineral or chemical fertilizers in tablets or similar forms or in packages of a gross weight of <= 10 kg 1.9%
See More Products 66.9%
Main Imports
(% of Imports)
2010
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 23.8%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 4.5%
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) 3.2%
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) 2.8%
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 1.9%
See More Products 63.9%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen 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 (Labour 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: Andrius KUBILIUS (since 27 November 2008)
Next Election Dates
Presidential: May 2014
Parliamentary: October 2012 (last elections held in 2008)
 

Indicator of Freedom of the Press

World Rank:
13/178
Evolution:
3 places down compared to 2009

Source: Worldwide Press Freedom Index 2010, Reporters Without Borders

 

Indicator of Political Freedom

Ranking:
Free
Political Freedom:
1/7
Civil Liberties:
1/7

Map of freedom 2010
Source: Freedom House

 

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Last Updates: January 2012