Economic trends
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 branches 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.
International trade
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.
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Last updates: February 2012
