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Robertas DargisPresident of the Lithuanian Confederation of Industrialists
2017 06 15
Lithuania: in a wind of change
Lithuanian Confederation of Industrialists -the largest business organisation in Lithuania
2
~3000 Members
Sectoralassociations
50
7Regional
associations
Source: Lithuanian Confederation of Industrialists
31Individualmember
64% of Lithuania’s economy is created by sectors represented by LPK
63,6%36,4%
Sectors represented by us
Other sectors
GROSS VALUE ADDED IN 2015
GROSS VALUE ADDED BY SECTORS REPRESENTED BY LITHUANIAN CONFEDERATION OF INDUSTRIALISTS | PCT.
JOBS CREATED IN 2015• Manufacturing
• Transportation and Storage
• Construction
• Financial and Insurance activities
• Accommodation
• Other sectors
> 19 bln. Eur
> 550thousand
jobs
EXPORT SHARE IN GDP, 2015
79%(22,6 bln. Eur)
Source: Lithuanian Confederation of Industrialists and Lithuanian Department of Statistics3
In 2016 Lithuania showed a modest economic growth
4Source: Eurostat 2017
2,3%2,0% 1,9%
1,6%
0%
1%
2%
3%
4%
5%
6%
Irel
and
Mal
ta
Ro
man
ia
Luxe
mb
ou
rg
Bu
lgar
ia
Slo
vaki
a
Spai
n
Swed
en
Cro
atia
Cyp
rus
Po
lan
d
Slo
ven
ia
Cze
ch R
epu
blic
Lith
uan
ia
Net
her
lan
ds
Latv
ia
Hu
nga
ry
EU (
28
co
un
trie
s)
Ger
man
y
Un
ited
Kin
gdo
m
Esto
nia
Au
stri
a
Po
rtu
gal
Fin
lan
d
Den
mar
k
Be
lgiu
m
Fran
ce
Ital
y
Gre
ece
REAL GDP GROWTH IN EUROPEAN COUNTRIES (2016) | PCT. CHANGE
In the I-st quarter of 2017 Lithuania’s economy starts to pick up
5
1,6%
6,0%
3,8%3,5% 3,5%
1,8%2,3%
4,1%
2010 2011 2012 2013 2014 2015 2016 20171Q
LITHUANIA‘S REAL GDP GROWTH | PCT.
1,8%
4,1%
2016 1Q 2017 1Q
LITHUANIA‘S REAL GDP GROWTH 1Q | PCT.
Source: Lithuanian Department of Statistics 2017
*Real GDP growth compared to corresponding period of previous year (seasonally and working day adjusted)
22 % of all gross value added in Lithuania is created by Industry
6 931
7 493 7 4497 630 7 580 7 668
2011 2012 2013 2014 2015 2016
GROSS VALUE ADDED CREATED BY INDUSTRY | MILLION EUR
+2,3%
222,6
230,3 230,5
226,6229,6
238,5
2011 2012 2013 2014 2015 2016
EMPLOYMENT IN INDUSTRY | THOUSAND PERSONS
+3,5%
Source: Lithuanian Department of Statistics 20176
Industrial production capacity utilization is high
3 006,7
3 140,8
3 416,9
2015 1Q 2016 1Q 2017 1Q
INDUSTRIAL PRODUCTION (VAT AND EXCISES EXCLUDED)* | MILLION EUR
75,8%75,6%
75,6%
76,6%
76,1%76,3%
77,1%
INDUSTRIAL PRODUCTION CAPACITY UTILIZATION LEVEL | PCT.
Source: Lithuanian Department of Statistics 2017
*Manufacturing excluded refined petroleum products (constant 2010 prices)
7
Despite that Russia remains our top export destination, only 9% of exported goods are of Lithuanian origin
Export of goods of Lithuanian origin Re-export
Source: Lithuanian Department of Statistics 2016
TOP 10 DESTINATIONS OF LITHUANIAN GOODS EXPORT IN 2016 | MILLION EUR
3 049,1
2 228,62 051,5
708,4871,8 962,3 1 075,5 1 168,1 1 199,4
1 737,8
8
In 2016 Lithuanian producers entered new markets in Asia and USA
0,9% 7,2%
-13,2% -9,3% -19,8%
23,7% 23,6%
73,8%
178,0%
EU Asia CIS Russia Ukraine USA China India Japan
Source: Lithuanian Department of Statistics 2016
EXPORTS OF GOODS* (EXLUDING MINERAL FUELS) GROWTH IN 2016 | PCT.
9
*Exports of goods of Lithuanian origin CIS – Commonwealth of Independent States
TOP 10 goods exported by Lithuania’s producers
LITHUANIAN GOODS EXPORT STRUCTURE 2016 | PCT.
14%
8%
8%
7%
6%4%4%3%3%
43%
Mineral fuels
Machinery and mechanical appliances
Furniture
Electrical machinery equipment and parts
Plastics and articles thereof
Vehicles, parts and accessories
Wood and articles of wood
Pharmaceutical products
Fertilizers
Others
Source: Lithuanian Department of Statistics 201610
In the I st. quarter of 2017 goods export to the United Kingdom decreased by 11%
22%19%
10%8%
16%
26%
34%
-11%
33%
5%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
LITHUANIA’S GOODS EXPORT 2017 1 QUARTER COMPARED TO THE PREVIOUS YEAR | PCT.
Source: Lithuanian Department of Statistics 201711
210,5 188,3
44,239,4
2016 1Q 2017 1Q
Re-export
Export of goods of Lithuanian origin
Decline of goods export to United Kingdom was mainly influenced by the decrease of GBP value
GOODS EXPORT TO UNITED KINGDOM | MILLION EUR
254,7227,6
-10,6%
1
1,05
1,1
1,15
1,2
1,25
1,3
1,35
1,4
1,45
1,5
-10%
GBP / EUR EXCHANGE RATE
2015 2016 20172016-06-23
Source: Lithuanian Department of Statistics 201712
LPK “Brexit” working group
Effect evaluation
Recommendations for negotiations
Wood
Furniture
PlasticsPharmaceuticals
Textile
Prepared foodstuffs
Brexit WG
Source: Lithuanian Confederation of Industrialists
Qualitative and quantitative surveys and further assessment of export trends
13
Global Competitiveness Index (Lithuania’s rank)
14Source: The Global Competitiveness Index 2016-2017
RANK 2015 2016
15
Global competitiveness index
Ease of access to loans
Effect of taxation on incentives to invest
Business impact of rules on FDI
No. of procedures to start a business
Hiring and firing practices
Redundancy costs weeks of salary
Burden of government regulation
Wastefulness of government spending
Availability of latest technologies
Quality of overall infrastructure
Quality of the education system
Venture capital availability
University-industry collaboration in R&D
Time to start a business days
36 35
91 53
83 68
81 66
9 3
120 116
109 105
103 92
92 89
31 28
30 28
53 57
48 51
27 34
9 13
- Lithuania’s ranking decreased in 2016
Global Competitiveness Index (Lithuania’s rank) (II)
Source: The Global Competitiveness Index 2016-2017
Technological readiness
Higher education and training
Labor market efficiency
Foreign relations
Healthcare
Financial market development
23,3%
20,0%
17,5%
16,7%
13,3%
9,2%
WHAT SHOULD BE THE PRIORITIES OF THE GOVERNMENT?
Higher education reform – the most importantjob for the government
Source: Lithuanian Confederation of Industrialists16
LPK is actively preparing recommendations to the Government
LPK tries to create the most favorable conditions for economic, technical and social progress:
• Autumn 2016 – meetings with political parties
• November 2016 – Recommendations for the Programme of the Government (2016–2020)
• January 2017 meetings with newly appointed ministers of Lithuania
• Recommendations for Implementation plan of the Programme of the Government
• LPK and Lithuanian Government meeting (April 2017)
Source: Lithuanian Confederation of Industrialists17
www.lpk.lt