Introduction on Lithuanian economy
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Introductory presentation on Lithuanian economy
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Introduction on Lithuanian economy
- 1. Review of Lithuanian economy Aleksandr Izgorodin Expert – Lithuanian Innovation Centre
- 2. Lithuania:generalfacts Economy: Lithuania is the biggest economy of the Baltic region, accounting for almost half (47%) of the Baltic region’s GDP. 5th fastest growing economy in the EU over the last 5 years (GDP grew by 15%). Fastest growing economy of the Baltic region. GDP per capita – 21 600 EUR (based on purchasing power standard). Currency – Euro (2015). 2
- 3. Lithuania:generalfacts Demography: Total population: 2 888 mln. (2016). Children: 453 ths; Working-age population: 1 790 ths; Pension age population: 644 ths. 28 retirees per 100 working-age persons. Median age: 43 years. Unemployment rate: 8,3% (2017). 3
- 4. Lithuania:generalfacts Leadership: Lithuania – gateway to the market of 700 mln. Consumers (EU and CIS). EU accounts for 73% of Lithuanian export. Ranked 21st in World Bank’s Doing Business report (out of 190 economies). 4th lowest corporate tax in the EU (15%). 3 days to start a business. 4
- 5. Lithuania:generalfacts Leadership: 1st in EU for coverage of mobile 4G Internet. Lowest price of fixed broadband Internet in the EU. Vilnius – one of the 4 least expensive capitals to live in for expatriates. 1st in the EU in regard to population with higher education (53%). Highest share of transport in GDP (13%) in the whole EU. 5
- 6. Economy 6
- 7. LithuaniaisthebiggesteconomyoftheBalticregion 7 34,415 21,600 17,747 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 Lithuania Latvia Estonia Real GDP, 2016, mln. EUR 47 29 24 Real GDP, % of Baltic region’s GDP, 2016 Lithuania Latvia Estonia Source: Eurostat
- 9. Lithuania’sGDPpercapitahasreached75%ofEUaverage 9Source: Eurostat 30 35 40 45 50 55 60 65 70 75 80 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita (PPP standard) as share of EU average, % Estonia Latvia Lithuania
- 10. Lithuanianeconomyisdominatedbymanufacturing,trade, transportandconstruction 10Source: Lithuanian Statistics Department 19.3 18.2 11.7 7.3 6.7 6.1 4.4 3.9 3.7 3.6 3.5 2.6 2.1 6.9 0 5 10 15 20 25 Manufacturing Wholesaleandretailtrade Transport Construction Realestateactivities Publicadministrationand defense Education Professional,scientificand technicalactivities Humanhealthandsocial workactivities Agriculture Informationand communication Administrativeandsupport servicesactivities Financialandinsurance activities Other Structure of gross value added, %, 2015
- 11. AlmosthalfofLithuanianGDPisgeneratedinVilniusregion 11Source: Lithuanian Statistics Department 40 20 12 7 6 4 3 3 3 2 0 5 10 15 20 25 30 35 40 45 Vilnius county Kaunas county Klaipėda county Šiauliai county Panevėžys county Telšiai county Alytus county Marijampolė county Utena county Tauragė county Structure of regional gross value added, 2015, %
- 12. LithuanianeconomyquicklygotridofconsequencesoftheGlobal FinancialCrisis 12Source: Lithuanian Statistics Department 6.6 7.7 7.4 11.1 2.6 -14.8 1.6 6 3.8 3.5 3.5 1.8 2.3 -20 -15 -10 -5 0 5 10 15 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Change in real GDP, compared to previous period, %
- 13. Lithuaniaisthe5th fastestgrowingeconomyintheEUoverthelast5 years 13Source: Eurostat 44.1 31.0 18.6 17.0 15.8 14.1 13.7 13.5 12.1 11.4 10.7 9.9 9.6 8.6 6.3 5.9 5.6 4.5 4.4 4.4 4.1 4.0 3.9 3.1 0.7 -1.2 -1.4 -2.8 -6.2 -10.2 -20.0 -10.0 0.0 10.0 20.0 30.0 40.0 50.0 Ireland Malta Luxemburg Romania Lithuania Latvia Poland Slovakia Estonia Sweden UnitedKingdom Hungary Bulgaria CzechRepublic Germany Denmark EU-28 Belgium Eurozone Netherlands Slovenia Austria France Spain Croatia Finland Portugal Italy Cyprus Greece Change in real GDP in 2016, compared to 2011, %
- 14. Exportwasthecatalystofeconomicrecoveryafterthecrisis.GDPis 6%abovepre-crisislevel 14Source: Lithuanian Statistics Department 29.0 38.2 49.9 49.7 22.8 3.0 -14.3 55.5 27.9 6.3 -20.0 -10.0 0.0 10.0 20.0 30.0 40.0 50.0 60.0 Private consumption Investment Export of goods and services Import of goods and services GDP Change in real GDP and GDP components, % 2016 compared to 2010, % 2016 compared to 2008, %
- 15. Exportisconcedingtheroleoflocomotiveofeconomicgrowthto domesticconsumption 15Source: Lithuanian Statistics Deartment -3.4 1.5 18.9 18.7 1.6 4.6 20.1 14.9 14.2 6.0 3.1 -1.8 12.2 6.6 3.8 4.3 8.3 9.6 9.3 3.5 4.3 3.7 3.5 3.3 3.5 4.1 4.7 -0.4 6.2 1.8 5.6 -0.5 2.9 2.6 2.3 -5.0 0.0 5.0 10.0 15.0 20.0 25.0 Private consumption Investments Export Import GDP Change of GDP and GDP components, compared to previous period, % 2010 2011 2012 2013 2014 2015 2016
- 16. Manufacturing 16
- 17. Lithuaniadidnotsufferfromdeindustrializationthataffectedthe EuropeanUnion 17Source: Eurostat 10.0 12.0 14.0 16.0 18.0 20.0 22.0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Share of manufacturing in GDP, % EU-28 Lithuania
- 18. Morethan60%ofgoodsproducedbyLithuanianmanufacturing companiesareexported 18Source: Lithuanian Statistics Department 45.8 46.8 48.6 47.7 46.4 45.2 41 40.2 39.8 39.8 40.7 39.3 38.1 54.2 53.2 51.4 52.3 53.6 54.8 59 59.8 60.2 60.2 59.3 60.7 61.9 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Structure of realization of manufacturing goods, % Lithuanian market Export markets
- 19. Lithuanianmanufacturingisverydiverse 19Source: Lithuanian Statistics Department 22 13 11 8 6 5 4 4 3 3 3 3 3 3 2 2 2 2 1 0 5 10 15 20 25 Manufactureoffoodproducts andtobacco Manufactureofchemicalsand chemicalproducts Manufactureoffurniture Manufactureofwoodandof productsofwood Manufactureofrubberand plasticproducts Manufactureoffabricated metalproducts Manufactureofwearing apparel Manufactureofbeverages Manufactureofothernon- metallicmineralproducts Manufactureoftextiles Manufactureofpaperand paperproducts Manufactureofmachineryand equipment Repairandinstallationof machineryandequipment Manufactureofelectrical equipment Manufactureofcomputer, electronicandopticalproducts Manufactureofmotor vehicles,trailersandsemi- trailers Printingandreproductionof recordedmedia Manufactureof pharmaceuticalproducts Othermanufacturing Structure of manufacturing production, 2016, %
- 20. Lithuanianmanufacturingisonthepathofdynamicgrowth 20Source: Lithuanian Statistics Department 9.5 12.3 9.4 5.3 8.0 5.3 5.6 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 2010 2011 2012 2013 2014 2015 2016 Change in manufacturing output, compared to previous period, %
- 21. Foreigntrade 21
- 22. Lithuaniatendstohavenegativetradebalanceduringperiodsof economicgrowth 22Source: Lithuanian Statistics Department -16.0 -14.0 -12.0 -10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 58.0 60.0 62.0 64.0 66.0 68.0 70.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Trade balance as share in GDP and share of consumption in GDP, % Trade balance as share in GDP, % Share of consumption in GDP, %
- 23. EUaccountsformorethan70%ofLithuanianexport 23Source: Lithuanian Statistics Department 71 11.2 7.3 1.6 0.7 2.7 2.3 73 4.6 2.4 2.7 0.9 4 3.7 0 10 20 30 40 50 60 70 80 EU CIS Russia Asia China North America USA Structure of export of goods of Lithuanian origin, % 2013 2016
- 24. CentralEuropeandScandinaviaarethemainexportmarketsfor Lithuania 24Source: Lithuanian Statistics Department 12 8 8 7 6 5 4 4 4 4 3 3 3 2 2 0 2 4 6 8 10 12 14 Germany Sweden Poland UnitedKingdom Latvia Norway Denmark Netherlands Italy France USA Estonia Finland Belgium Russia Structure of export of goods of Lithuanian origin, 2016, % (top 15 countries)
- 25. Lithuanianexportisdominatedbywoodandtimberproducts 25Source: Lithuanian Statistics Department 14 9 7 5 5 5 4 4 3 3 0 2 4 6 8 10 12 14 16 Furniture Plastics Wood and wooden products Fertilizers Grain Electric machinery and equipment Milk and milk products Tobacco Machinery and equipment Goods from iron and steel Structure of export of goods of Lithuanian origin, 2016, % (top 15 categories)
- 26. RussiaisthebiggestimportpartnerofLithuania–butonly15th largestexportpartner 26Source: Lithuanian Statistics Department 14.4 12.1 10.8 8.0 5.4 4.8 4.4 3.4 3.3 3.1 2.9 2.8 2.7 2.5 2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 Russia Germany Poland Latvia Italy Netherlands Sweden France Estonia Belgium China Belarus UnitedKingdom Finland Spain Structure of Lithuanian import, 2016, % (top 15 countries)
- 27. Lithuanianimportisdominatedbymineralfuel 27Source: Lithuanian Statistics Department 17.5 10.4 8.6 7.7 4.6 3.9 2.2 2.2 2.0 2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 Mineral fuel Machinery and equipment Transport vehicles Electric machinery and equipment Plastics and articles thereof Pharmaceutical products Organic chemical products Wood and articles thereof Optical, precision, surgery equipment Articles from iron and steel Structure of Lithuanian import, 2016, % (top 10 categories)
- 28. Labourmarket 28
- 29. LithuanianunemploymenthasdroppedtothelevelofEUaverage… 29Source: Eurostat 0.0 5.0 10.0 15.0 20.0 25.0 Seasonally-adjusted unemployment rate, % EU-28 Estonia Latvia Lithuania
- 30. …andisalreadybeloweurozoneaverage 30Source: Eurostat 23.5 18.0 12.9 11.6 11.5 10.0 10.0 9.5 9.3 8.7 8.6 8.3 8.0 7.8 7.0 6.8 6.7 6.6 6.4 6.1 5.8 5.7 5.4 5.3 5.3 4.5 4.3 4.1 3.9 3.4 0.0 5.0 10.0 15.0 20.0 25.0 Greece Spain Cyprus Croatia Italy France Portugal Eurozone Latvia Finland Slovakia Lithuania EU-28 Slovenia Belgium Sweden Bulgaria Ireland Denmark Luxembourg Estonia Austria Romania Netherlands Poland UnitedKingdom Hungary Malta Germany CzechRepublic Seasonally-adjusted unemployment, February 2017, %
- 31. Transportandmanufacturingcreatedmostjobsduringeconomic recovery 31Source: Lithuanian Statistics Department 15.8 11.6 9.7 6.7 5.1 4.8 4.5 3.7 3.6 3.3 2.7 2.7 1.4 1 0 2 4 6 8 10 12 14 16 18 Transportationandstorage Manufacturing Administrativeandsupport serviceactivities Wholesaleandretailtrade Agriculture,forestryand fishing Professional,scientificand technicalactivities Informationand communication Accommodationandfood serviceactivities Arts,entertainmentand recreation Construction Watersupply;sewerage, wastemanagement Education Humanhealthandsocial workactivities Realestateactivities Change in number of employees in private sector, 2016 compared to 2010, ths. of persons
- 32. Tradeandmanufacturingarethebiggestemployersintheprivate sector 32Source: Lithuanian Statistics Department 202.4 194.7 82 69.7 44.6 40.7 33.1 32.9 24.6 17.2 0 50 100 150 200 250 Wholesaleandretailtrade Manufacturing Construction Transportationandstorage Agriculture,forestryand fishing Administrativeandsupport serviceactivities Professional,scientificand technicalactivities Accommodationandfood serviceactivities Informationand communication Financialandinsurance activities Number of employees, ths of persons, 2016
- 34. FDI 34
- 35. Lithuaniaisbecomingincreasinglypopularamongforeigninvestors (1) 35Source: Lithuanian Statistics Department 4,690 6,921 8,377 10,283 9,191 9,206 10,031 11,029 12,101 12,720 12,747 13,497 13,066 0 2000 4000 6000 8000 10000 12000 14000 16000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Accumulated foreign direct investment (FDI), mln. EUR
- 36. Lithuaniaisbecomingincreasinglypopularamongforeigninvestors (2) 36Source: Lithuanian Bank 115.12 179.37 0.00 20.00 40.00 60.00 80.00 100.00 120.00 140.00 160.00 180.00 200.00 2009-2012 2013-2016 FDI into shareholder capital, mln. EUR
- 37. EUisthemaininvestorinLithuania 37Source: Lithuanian Statistics Department 19 12 10 7 7 5 5 5 5 3 3 3 2 2 2 0 5 10 15 20 25 Sweden Netherlands Germany Poland Norway Estonia Cyprus Denmark Finland Malta France Switzerland Russia Latvia USA Structure of accumulated FDI by countries, 2016, % EU: 82% of FDI in Lithuania Scandinavian countries: 42% of EU FDI in Lithuania; CIS: 3% of FDI in Lithuania. USA + Canada: 2,5% of FDI in Lithuania.
- 38. MainFDIsegments:servicescentresandmanufacturing 38Source: Invest Lithuania 37 31 13 5 4 3 0 5 10 15 20 25 30 35 40 Shared services centers Manufacturing IT design, development and testing Business services Sales, marketing and support Logistics FDI structure by segments, 2010-2016, %
- 39. FDIexamples:servicescentres 39Source: Invest Lithuania AIG Functions: insurance administration; customer support Personnel: 250 Established: 2015, Vilnius BARCLAYS Functions: IT development and support Personnel: 1 200 Established: 2009, Vilnius WESTERN UNION Functions: anti money laundering; compliance; HR; transactions Personnel: 1 600 Established: 2010, Vilnius
- 40. FDIexamples:manufacturingandtechnologies 40Source: Invest Lithuania UBER Functions: critical infrastructure support, DevOps, software development Personnel: 30 Established: 2015 m., Vilnius SCHMITZ CARGOBULL Products: trailers and semi-trailers; iso-thermal trucks Personnel: 440 Established: 1999, Panevėžys THERMOFISHER SCIENTIFIC Products: reagents, R&D Personnel: 630 Įkurtas: 2010, Vilnius
- 41. Maintaxes 41
- 42. MaintaxesinLithuania 42Source: Invest Lithuania Main tax rates: Corporate profit tax: 0-15%; VAT: 21%; Dividends: 0-15%; Personal income tax: 15%; Social security tax (employer): 30,98%; Social security tax (employee): 9%. Taxation benefits in free economic zones: 0% Corporate tax rate for the first 6 years; 50% discount on Corporate tax over the next 10 years; O% tax on dividends for foreign shareholders; O% tax on real estate.
- 43. VšĮ Lietuvos inovacijų centras Mokslininkų g. 6A, LT-08412 Vilnius Tel.: +370 5 235 61 16 Faks.: +370 5 213 27 81 lic@lic.lt Thankyouforyourattention! 2017-10-29 43