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. EU member since 2004, the country has experienced significant growth (8% annually over 10 years before the crisis). 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 droppped 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 (5.8% in 2011). The inflow of European funds and remittances from Lithuanian citizens living abroad (which totalled almost EUR 1 billion in 2010, i.e. 3% of the GDP) have nevertheless still not manage to counterbalance the drop in consumption.
The emergency aid accorded by the European Union came along with an austerity policy and unpopular budget cuts. The unemployment rate affected more than 15.6% of the active population in 2010, the underground economy increased to around 30% of the GDP. Still, unemployment is now falling (10% in 2011) and the country's economic position is stronger in 2012 than before the crisis, although its budget deficit (5.3%) remains high. The country hopes to adopt the euro in 2014.
Main branches of industry
Agriculture and fishing contributes around 4% 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 almost 27% to the GDP and employs 30% of the active population.
Lastly, the services sector contributes almost 69% 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 Germany, Poland, Latvia and the Netherlands. The European Union accounts for 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, Latvia, Germany, Poland, Estonia and the Netherlands. The country's main imports are mineral fuels and oil (33%), vehicles, electrical and electronic equipment (12%) and plastics (11%). In 2011, the countries of the European Union still accounted for more than 55% of Lithuania's total imports.
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Last updates: May 2012
