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Lithuania: Economic and Political Outline
Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline
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 Indicators | 2009 | 2010 | 2011 | 2012 (e) | 2013 (e) |
| GDP (billions USD) | 36.92 | 36.37 | 43.17e | 46.01 | 48.82 |
| GDP (Constant Prices, Annual % Change) | -14.7 | 1.3e | 6.0e | 3.4 | 3.6 |
| GDP per Capita (USD) | 11,056 | 11,046e | 13,190 | 14,142 | 15,096 |
| General Government Balance (in % of GDP) | -6.3 | -5.5e | -4.9 | -4.5 | -3.9 |
| General Government Gross Debt (in % of GDP) | 29.6 | 38.7 | 42.8 | 44.6 | 45.9 |
| Inflation Rate (%) | 4.2 | 1.2e | 4.2 | 2.6 | 2.5 |
| Unemployment Rate (% of the Labor Force) | 13.7 | 17.8 | 15.5 | 14.0 | 12.0 |
| Current Account (billions USD) | 1.65 | 0.67 | -0.80 | -1.26 | -1.76 |
| Current Account (in % of GDP) | 4.5 | 1.8e | -1.9e | -3.6 | - |
Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data
Note: (e) Estimated Data
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.
| 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.
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| Monetary Indicators | 2006 | 2007 | 2008 | 2009 | 2010 |
| Lithuanian Litus (LTL) - Average Annual Exchange Rate For 1 USD | 2.75 | 2.52 | 2.36 | 2.48 | 2.61 |
Source: World Bank - Last Available Data.
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Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation
Note: 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.
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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.
| Foreign Trade Indicators | 2007 | 2008 | 2009 | 2010 | 2011 |
| Imports of Goods (million USD) | 24,412 | 31,098 | 18,304 | 23,277 | 31,517 |
| Exports of Goods (million USD) | 17,144 | 23,646 | 16,454 | 20,819 | 28,080 |
| Imports of Services (million USD) | 3,271 | 4,206 | 2,832 | 2,721 | 3,457 |
| Exports of Services (million USD) | 3,967 | 4,783 | 3,640 | 4,070 | 5,019 |
| Imports of Goods and Services (Annual % Change) | 10.7 | 10.3 | -28.4 | 17.6 | - |
| Exports of Goods and Services (Annual % Change) | 3.0 | 11.6 | -12.7 | 16.3 | - |
| Imports of Goods and Services (in % of GDP) | 67.4 | 71.7 | 56.1 | 69.6 | - |
| Exports of Goods and Services (in % of GDP) | 54.1 | 59.9 | 54.6 | 68.2 | - |
| Trade Balance (million USD) | -5,874 | -6,207 | -1,154 | -1,560 | - |
| Trade Balance (Including Service) (million USD) | -5,242 | -5,165 | - | - | - |
| Foreign Trade (in % of GDP) | 121.5 | 131.6 | 110.7 | 137.8 | - |
Source: WTO - World Trade Organization ; World Bank , Last Available Data
| 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
Source: Comtrade, Last Available Data
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Source: Worldwide Press Freedom Index 2011, Reporters Without Borders
Note: 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 is 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.).
Map of freedom 2010
Source: Freedom House
Note: 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.
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Last Updates: May 2012