The Lithuanian Economy
The economy of Lithuania has
been dramatically transformed since the country declared its
independence from the former Soviet Union in 1990. Most industry
segments have been privatized and foreign investment has increased.
Trade with former Soviet states has decreased as a percentage of
total exports. Lithuania continues to experience an economic
expansion reliant on its traditional strengths in engineering.
Lithuania experienced a period of very robust economic growth after
it joined the European Union in 2004. Strong expansion of gross
domestic product continued throughout most of the decade, with the
2007 GDP annual growth rate approaching 9 percent. The global
financial crisis eventually affected Lithuania in 2009, resulting in
a negative rate. GDP growth in 2010 was back to over 1 percent. GDP
growth in 2011 was 5.9 percent, and GDP growth in 2012 was 3.5
percent. Currently, the total size of gross domestic product is $65
billion, as measured in dollars.
The number of jobs in the financial services sector has doubled in
the last decade. The number of jobs in the agricultural sector has
declined by one half over the same period. Economic growth is
notably stronger in the areas of engineering and biotechnology.
Lithuania has a concentration of laser companies such as Ekspla,
designing lasers for material processing and manufacturing process
control. The Maxima Group retail chain is based in Vilnius and is
the largest employer in the Baltic region. The Vilnius Stock
Exchange has operated since 1993 and facilitates Baltic area trades.
Lithuania has a long history of Russian interaction and
intervention. After a period of German occupation during World War
II, the Soviet Union laid claim to Lithuania in 1944. The status of
Lithuania today is drastically different from its condition during
the years following World War II. As a Soviet state, the economy of
Lithuania was predominately agricultural, with notable additional
output in textiles and engineering. A complete ban on private
ownership of agricultural farmland from 1949 to 1952 resulted in a
decade of production declines. Agricultural production levels
eventually recovered in the 1960s to pre-war levels. With 40 percent
of its land mass under cultivation, Lithuania was able to supply
most of its own food supply and produced a surplus of flax and dairy
Although Vilnius was and still is the main engineering center, other
locations of textile engineering and production were Kaunas and
Klaipeda. Lithuania accounted for about six percent of the total
output of machine tools in the former USSR. That legacy of machine
tool design still resonates in today’s growth industries.
Vilnius continues to build on its heritage as a center of
engineering excellence, combining the disciplines of mechanical
engineering and information technology. Ekspla and other laser
technology companies benefit from the expertise of the Institute of
Physics at the University of Vilnius. The government of Lithuania
provides funding to promote research in biotechnology, benefiting
companies such as Fermentas and Sicor Biotech.
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