The lists of the best-selling medicines in Russia and Ukraine are dominated by innovative preparations of foreign origin.
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We are a member of the European Association of Opinion and Marketing Research Professionals ESOMAR.
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| Why to enter this market? |
- Stable political environment
- Developed infrastructure
- EU membership
- Geographical location – access to the Baltic, Russia, Belarus and Poland
- Education and R&D base
- Low employment costs
- Skilled workforce
- Strong GDP growth rate
- Diversified industry – existing supplier base
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Business and economic environment
Like Estonia and Latvia, Lithuania is a former Soviet republic which has been a member of the EU since 2004. Like the other two Baltic states, the country offers a congenial location for businesses eager to increase their presence in Russia but also has a few advantages over its Baltic siblings - a border with the Kaliningrad exclave of Russia, access to Poland, the largest market of the new EU, and to Belarus. In addition, it should be emphasised that most of the population speak Russian and that Polish is widely spoken in some areas. The political and economic environment in the country is stable, and the GDP growth rate over the next few years is expected to remain high, as the economy recovers fully from the recession of 2009. The current account deficit, which had risen to approximately 15% of GDP in 2007-08, recovered to a surplus of 4% in 2009 and 3.5% in 2010 in the wake of a cutback in imports to almost half the 2008 level. Opportunities in Lithuania are offered in areas such as ICT, biotechnology, plastics, lasers, machinery and electrical equipment, metal processing, furniture and wood processing, food, business process outsourcing and logistics. Average employment costs are still low, and Lithuanian businesses are offered a tempting 15% corporate tax rate.
Prior to 2008, the Lithuanian economy had been growing at a rate of 7-8% per year, which fell to 3.1% in 2008, then to a negative 14.8% in 2009. After this it bounced back to a positive figure of 2.1% in 2010. As a result of the economic slowdown, the inflation rate, which had been high 8-11%, fell to 4.2% in 2009 and 0.1% in 2010. However, it is expected to increase in tandem with GDP growth, but to remain under 1.5% between 2012 and 2015.
The unemployment rate increased to 13.7% at the end of 2009 and to 18% in 2010, as a result of the growing economic problems. However, unemployment is expected to fall to 15.5% in 2011 and gradually to settle to 8.5% between 2012 and 2015. The gross average monthly salary was EUR 561 in 2009. Like Latvia and Estonia, Lithuania is planning to join the Euro zone, but the date has yet to be determined.
Foreign direct investment (FDI) in Lithuania on 1 July 2008 was worth EUR 10.04bn, or 0.6 per cent more than that of 1 April 2008 (EUR 9.98bn). The bulk came from investors from Sweden –14.1%, Poland – 12.%, Denmark –11.1%, Russia –10.3%, Germany – 8.7%, Estonia – 6.7%, Latvia –5.1%, Finland – 5.0%, and the Netherlands – 4.5%. Direct investment from the EU-27 countries came to EUR 7.87bn (78.4% of total FDI), and that from the CIS countries to EUR 1.1bn, or 10.9%.
Lithuania’s main natural resources are peat and arable land. The most important industrial subdivisions are: metal-cutting machine tools, electric motors, television sets, refrigerators and freezers, petroleum refining, shipbuilding (small ships), furniture making, textiles, food processing, fertilisers, agricultural machinery, audio-visual equipment, electronic components, computers and amber.
In 2009, the country’s most important export partners were Russia (13.2%), Latvia (12%), Germany (9.6%) and Poland (7.1%). In terms of imports, its main partners were Russia (30%), Germany (10.1%), Poland (9.9%) and Latvia (6.3%). The EU and the CIS constitute the largest markets for Lithuanian products and also the largest providers for the Lithuanian market.
Social environment
According to Invest in Lithuania, Lithuania has twice as many people with higher education qualifications as the EU-15 average and the proportion is the highest in the Baltic region. In addition, 90% of Lithuanians speak at least one foreign language and half of the population speak two, mostly Russian and English or Polish. According to the 2001 Lithuanian census about 84% of the country's population speak Lithuanian as their native language, 8.2% are native speakers of Russian, and 5.8% native speakers of Polish. Almost two-thirds are fluent in Russian, whereas only about 16% claim to speak English. According to the Euro barometer survey carried in 2005, 80% of Lithuanians can speak Russian and 32% can speak English.
Vilnius University, the largest university in Lithuania, is one of the oldest in Northern Europe, whereas the Kaunas University of Technology is the largest technical university in the Baltic States and the second largest in Lithuania. Other universities include the Kaunas University of Medicine, the Lithuanian Academy of Music and Theatre, Vytautas Magnus University and Mykolas Romeris University.
Most Lithuanian schools teach English as a first foreign language, but students may also learn German, or, in some schools, French. There are also schools at which Russian and Polish are the primary languages of education in the areas populated by these minorities.
Infrastructure and technological environment
The railway network in Lithuania is below par in terms of network length. There are fewer tracks (1,768 km) than in Latvia (2,303 km), which is smaller in area. However, the ratio between the total length of roadways (80,000 km) and the surface of the country is average for the region.
In 2009, there were over 4.96 million mobile phone users and more than 1,964,000, internet users in Lithuania, i.e, 55% of the population.
Political environment
Lithuania is a democracy with a unicameral Parliament. Executive power is in hands of the President, who is elected for five years. Lithuania joined both NATO and the European Union in the spring of 2004.
After the country’s parliamentary elections on 27 November 2008, Andrius Kubilius became Prime Minister of Lithuania. He is the leader of the conservative political party Homeland Union - Lithuanian Christian Democrats. The next presidential elections in Lithuania are due in May 2014, and the next parliamentary elections in October 2012.
General data
Area: 65,200 sq km
Population: 3.5m (2010)
Capital: Vilnius
Language: Lithuanian (official), Russian is widely spoken as a second language by the majority of the population, and Polish by approximately 6%
Ethnic groups: Lithuanian 83.6%, Polish 6.3%, Russian 5.1%, Belarusian 1.1%, others 3.9%
National boundaries: Belarus, Latvia, Poland, Russia
Major economic indicators
| |
2007 |
2008 |
2009 |
2010 |
2011f |
| GDP (EUR bn) |
28.6 |
32.2 |
26.6 |
27.3 |
28.4 |
| Population (m) |
3.4 |
3.4 |
3.4 |
3.5 |
3.5 |
| GDP per capita (EUR) |
8411 |
9470 |
7823 |
7800 |
8114 |
| GDP (constant prices y-o-y%) |
8.9 |
3.1 |
-14.8 |
2.1 |
3.3 |
| Exports, real, y-o-y (%) |
4.3 |
11.5 |
-12.6 |
17.1 |
|
| Imports, real, y-o-y (%) |
11.6 |
10.3 |
-21.1 |
15.8 |
|
| CPI (average, y-o-y%) |
5.7 |
11 |
4.2 |
0.1 |
0.2 |
| Monthly wage, nominal |
548 |
654 |
561 |
531 |
|
| Unemployment rate (%) |
4.3 |
5.8 |
13.7 |
18 |
15.5 |
| Net FDI (EUR bn) |
1 |
0.8 |
0.4 |
0.3 |
|
| FDI% GDP |
3.6 |
2.4 |
0.8 |
1 |
|
| FX reserves (EUR bn) |
5.2 |
4.6 |
4.1 |
3.9 |
|
| Exchange rate to USD AVG |
2.52 |
2.35 |
2.66 |
2.63 |
2.56 |
| Exchange rate to EUR AVG |
3.45 |
3.45 |
3.45 |
3.45 |
3.45 |
Last update: Q1 2011
Useful data
Currency: Lithuanian litas (LTL)
Exchange rate: 1 LTL= 0.29 EUR (fixed rate since February 2002)
Time zone: GMT GMT +2
Area code: +370
If you would like to find out more on the Lithuanian market opportunities please do not hesitate to contact us directly:
phone: (48 12) 292 22 50
faks (48 12) 292 22 99
e-mail: info@pmrconsulting.com
PMR Business Solutions in Lithuania
Market reports Lithuania
To purchase or find detailed information on PMR Publications reports covering the general economy, construction, retail, pharmaceutical, and ICT sectors in Lithuania.
If you are looking for greater detail trust our research and consulting divisions to carry out projects tailored to your business needs.
Consulting in Lithuania
PMR Consulting offers a wide range of consulting services in Central and Eastern Europe for foreign companies interested in the region. The typical projects include: competitive intelligence, sourcing, strategic advisory, consulting at foreign direct investments and mergers & acquisitions.
Market research in Lithuania
PMR Research offers a full array of qualitative and quantitative research methodologies, providing services such as customer satisfaction studies, brand awareness and brand image research, distribution and competition studies, segmentation and sector analyses.
Case studies for Lithuania
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