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Europe
Lithuania |
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(Lietuvos Respublika)
Last reviewed: 11 August 2009 |
Country information
ECONOMY
Basic Economic Facts
GDP: US$38.9bn (2007)
GDP per capita: US$11,493 (2007)
Annual Growth: 8.9% (2007)
Inflation: 3.84% (2006)
Unemployment: 5.9% (Q3 2008)
Major Industries: Textiles, Oil Processing, Timber and Agricultural Products
Major trading partners: EU (especially Germany, Sweden, Denmark and UK)
Aid & development: EU projects amount to 180m Euro per annum
Further information about Lithuania's economy can be found at:
UK Trade & Investment Country Profile: Lithuania.
Lithuania’s economy is the largest of the three Baltic States. Its GDP is roughly the equivalent of Latvia and Estonia’s put together. But Lithuania's GDP per capita is only 45% of the EU average and not much more than one fifth of the UK's.
While Vilnius looks, and largely is, a prosperous Western capital, much of rural and provincial Lithuania is still extremely poor, with EU funding only beginning to make an impact.
Following independence Lithuania embarked on transforming its economy to one based on free market principles. The economy initially went into a deep recession but started to recover in the mid-1990's.
The Russian financial crisis, at the end of 1998, resulted in Lithuania losing 20% of her export market and GDP dropped by 4.1% in 1999. Since then the economy has recovered, mainly due to increases in domestic demand and exports to other EU member states. Sound monetary policy has resulted in one of the highest GDP growth rates in the EU coupled with relatively low inflation. Approximately 50% of Lithuanian exports go to the EU. Around 20% go to the countries of the former Soviet Union. The privatisation of many of the large, state-owned sectors has helped the transition towards a market economy with around 80% having now been privatised. However, recent increases in inflation caused Lithuania narrowly to miss joining the Euro earlier last year. Average unemployment is low (5.6%) due to economic growth and migration. Lithuania has the highest rate of migration in the EU, mainly to the UK and the Republic of Ireland.
