Lithuania - Economy

Economy

• In 2003, before joining the European Union, Lithuania had the highest economic growth rate amongst all candidate and member countries, reaching 8.8% in the third quarter.
• In 2004 – 7.4%; 2005 – 7.8%; 2006 – 7.8%; 2007 – 8.9%, 2008 Q1 – 7.0% growth in GDP reflects the impressive economic development and as a result is often termed as a Baltic Tiger. However, 2009 marked a dramatic decline in GDP at -14.74% attributed to overheating of the economy. In 2010, the rate was 1.33%.
• As of June 2012, the unemployment rate is 10.2%.
• Lithuania has a flat tax rate rather than a progressive scheme. In 2007, personal income tax was reduced to 24% and a reduction to 21% was made in January 2009. Lithuanian income levels are lower than in the older EU Member States. According to Eurostat data, Lithuanian PPS GDP per capita stood at 61 per cent of the EU average in 2008.

• The country boasts a well-developed modern infrastructure of railways, airports and four-lane highways.
• Structurally, there is a gradual but consistent shift towards a knowledge-based economy with special emphasis on biotechnology (industrial and diagnostic). The major biotechnology companies and laser manufacturers (Ekspla, Šviesos Konversija) of the Baltics are concentrated in Lithuania. Also mechatronics and information technology (IT) are seen as prospective knowledge-based economy directions.
• In 2009, Barclays established Technology Centre Lithuania – one of four strategic engineering centres supporting the Barclays Retail Banking businesses across the globe. In 2011, Western Union officially opened their new European Regional Operating Centre in Vilnius. The stated position of the Lithuanian government is that the focus of Lithuanian economy is high added-value products and services.
• Among other international companies operating in Lithuania are: PricewaterhouseCoopers, Ernst & Young, Societe Generale, UniCredit, Thermo Fisher Scientific, Phillip Morris, Kraft Foods, Mars, Marks & Spencer, GlaxoSmithKline, United Colors of Benetton, Deichmann, Statoil, Neste Oil, Lukoil, Tele2, Hesburger and Modern Times Group. TeliaSonera, ICA and Carslberg respectively own local telecommunications company Omnitel, retailer Rimi and beer breweries (Švyturys, Kalnapilis and Utenos Alus).
• Lithuanian banking sector is dominated by the Scandinavian banks: Swedbank, SEB, Nordea, Danske Bank, DNB ASA.
• Among the biggest Lithuanian companies are: Maxima Group, ORLEN Lietuva, Achema, Lifosa, Apranga.
• Corporate tax rate in Lithuania is 15% and 5% for small businesses. The government offers special incentives for investments into the high-technology sectors and high value-added products.
• Most of the trade Lithuania conducts is within the European Union.
• The litas, the national currency, has been pegged to the euro since 2 February 2002 at the rate of EUR 1.00 = LTL 3.4528, and Lithuania is expecting to switch to the euro on 1 January 2014.