Lithuanian exports which grew most across Europe last year will beat value records this year
According to the overview presented by the analysts of Enterprise Lithuania, the international economic environment has been currently particularly favourable for Lithuanian exporters, thus Lithuanian exports will maintain the growth rates and only internal factors such as a tense situation in the labour market and lack of production capacity will hinder development in foreign markets.
Based on the Eurostat’s data, in 2017, the value of Lithuanian exports recorded the most rapid growth not only in the Baltic countries, but also across Europe, which was 16.9 per cent. Estonian exports grew by 7.5 per cent, Latvian – 5.4 per cent, whereas the overall EU export growth accounted for 3.4 per cent.
According to Lithuanian statistics, in 2017, exports of services grew by 20.6 per cent (reached EUR 8.3 billion), re-exports, except for energy products, increased by 20 per cent (up to EUR 10.2 billion), whereas exports of goods of Lithuanian origin grew by 12.8 per cent (reached EUR 12.4 billion).
The analysts of Enterprise Lithuania forecast that in 2018, the most rapid (9.7 per cent – up to EUR 9.1 billion) growth will be recorded in exports of services, the growth of re-exports of goods, except for energy products, will be 9.3 per cent – up to EUR 11.1 billion, and the exports of goods of Lithuanian origin will grow by 6 per cent – up to EUR 13.2 billion, as compared to the last year.
“Although the percentage expression of the figures will not be that impressive this year, Lithuanian exporters will maintain growth rates and beat export value records. The growth of exports will slow down only due to the effect of the comparable statistical base. Particularly favourable global economic trends, which emerged last year, created the conditions for Lithuanian exporters to make use of all foreign sales opportunities and set export records – historically the level of utilization of production capacity in Lithuania was highest, thus we take off from a rather high level and can promise a further rise,” says Vadimas Ivanovas, Chief Analyst at Enterprise Lithuania.
According to him, favourable global economic trends will also precondition further development of exports in 2018, yet they will also highly depend on internal restrictive factors, i.e. a tense situation in the Lithuanian labour market and resolution of enterprises to invest in the improvement of production capacity. “Investments in production development are particularly important at present, thus if enterprises hesitate to invest in the improvement of production capacity, this might also have a negative impact on the country’s competitiveness in foreign markets in the long run,” adds Mr. Ivanovas.
Meanwhile global economic activeness and international trade have been growing at a bigger pace than expected and favourable development has been forecasted. This year, global GDP should grow by 3.5–3.7 per cent; the planned EU market growth will be 2.1–2.3 per cent, whereas Russia’s economic growth is forecasted to be 1.6–2 per cent. More than two-thirds of goods made in Lithuania and intended for export are exported to the EU, whereas Russia is the largest market for Lithuanian enterprises that are involved in re-exporting activities.
In 2017, Public Institution Enterprise Lithuania, which promotes Lithuanian exports, contributed to almost one-fifth (19 per cent) of success of exporters of goods of Lithuanian origin, by providing various export development services, and the exports of these exporters grew by 11.3 per cent. Last year, the value of exports of exporters who used export development services provided by Enterprise Lithuania reached EUR 5.1 billion, which accounted for 41 per cent of the total value of exports of goods of Lithuanian origin.
In the face of the pandemic, businesses and institutions in all countries began looking for solutions to contribute to faster management of COVID-19. Lithuania is not an exception: Lithuania exports and entrepreneurship agency “Enterprise Lithuania” promptly mobilized and took the initiative “Business against COVID-19”. This initiative aims to coordinate the Lithuanian businesses who can supply and manufacture personal protective equipment (PPE). The list of companies producing or providing PPE prepared by the agency includes more than 200 Lithuanian companies, of which as much as 30% are manufacturers capable of supplying their manufactured PPE.
Although the Lithuanian export growth rate slowed down in 2019, the country’s exporters still had something to enjoy. All of us have a different mood this spring – the coronavirus COVID-19 pandemic is disrupting business plans and destroying even the most cautious forecasts.