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Latvia vs. Lithuania

Economy

LatviaLithuania
Economy - overview

Latvia is a small, open economy with exports contributing more than half of GDP. Due to its geographical location, transit services are highly-developed, along with timber and wood-processing, agriculture and food products, and manufacturing of machinery and electronics industries. Corruption continues to be an impediment to attracting foreign direct investment and Latvia's low birth rate and decreasing population are major challenges to its long-term economic vitality.

Latvia's economy experienced GDP growth of more than 10% per year during 2006-07, but entered a severe recession in 2008 as a result of an unsustainable current account deficit and large debt exposure amid the slowing world economy. Triggered by the collapse of the second largest bank, GDP plunged by more than 14% in 2009 and, despite strong growth since 2011, the economy took until 2017 return to pre-crisis levels in real terms. Strong investment and consumption, the latter stoked by rising wages, helped the economy grow by more than 4% in 2017, while inflation rose to 3%. Continued gains in competitiveness and investment will be key to maintaining economic growth, especially in light of unfavorable demographic trends, including the emigration of skilled workers, and one of the highest levels of income inequality in the EU.

In the wake of the 2008-09 crisis, the IMF, EU, and other international donors provided substantial financial assistance to Latvia as part of an agreement to defend the currency's peg to the euro in exchange for the government's commitment to stringent austerity measures. The IMF/EU program successfully concluded in December 2011, although, the austerity measures imposed large social costs. The majority of companies, banks, and real estate have been privatized, although the state still holds sizable stakes in a few large enterprises, including 80% ownership of the Latvian national airline. Latvia officially joined the World Trade Organization in February 1999 and the EU in May 2004. Latvia also joined the euro zone in 2014 and the OECD in 2016.

After the country declared independence from the Soviet Union in 1990, Lithuania faced an initial dislocation that is typical during transitions from a planned economy to a free-market economy. Macroeconomic stabilization policies, including privatization of most state-owned enterprises, and a strong commitment to a currency board arrangement led to an open and rapidly growing economy and rising consumer demand. Foreign investment and EU funding aided in the transition. Lithuania joined the WTO in May 2001, the EU in May 2004, and the euro zone in January 2015, and is now working to complete the OECD accession roadmap it received in July 2015. In 2017, joined the OECD Working Group on Bribery, an important step in the OECD accession process.

The Lithuanian economy was severely hit by the 2008-09 global financial crisis, but it has rebounded and become one of the fastest growing in the EU. Increases in exports, investment, and wage growth that supported consumption helped the economy grow by 3.6% in 2017. In 2015, Russia was Lithuania’s largest trading partner, followed by Poland, Germany, and Latvia; goods and services trade between the US and Lithuania totaled $2.2 billion. Lithuania opened a self-financed liquefied natural gas terminal in January 2015, providing the first non-Russian supply of natural gas to the Baltic States and reducing Lithuania’s dependence on Russian gas from 100% to approximately 30% in 2016.

Lithuania’s ongoing recovery hinges on improving the business environment, especially by liberalizing labor laws, and improving competitiveness and export growth, the latter hampered by economic slowdowns in the EU and Russia. In addition, a steady outflow of young and highly educated people is causing a shortage of skilled labor, which, combined with a rapidly aging population, could stress public finances and constrain long-term growth.

GDP (purchasing power parity)
$54.02 billion (2017 est.)
$51.67 billion (2016 est.)
$50.55 billion (2015 est.)

note: data are in 2017 dollars

$91.47 billion (2017 est.)
$88.07 billion (2016 est.)
$86.05 billion (2015 est.)

note: data are in 2017 dollars

GDP - real growth rate
2.08% (2019 est.)
4.2% (2018 est.)
3.23% (2017 est.)
4.33% (2019 est.)
3.99% (2018 est.)
4.37% (2017 est.)
GDP - per capita (PPP)
$27,700 (2017 est.)
$26,200 (2016 est.)
$25,500 (2015 est.)

note: data are in 2017 dollars

$32,400 (2017 est.)
$30,700 (2016 est.)
$29,600 (2015 est.)

note: data are in 2017 dollars

GDP - composition by sector
agriculture: 3.9% (2017 est.)
industry: 22.4% (2017 est.)
services: 73.7% (2017 est.)
agriculture: 3.5% (2017 est.)
industry: 29.4% (2017 est.)
services: 67.2% (2017 est.)
Population below poverty line
25.5% (2015)
22.2% (2015 est.)
Household income or consumption by percentage share
lowest 10%: 2.2%
highest 10%: 26.3% (2015)
lowest 10%: 2.2%
highest 10%: 28.8% (2015)
Inflation rate (consumer prices)
2.9% (2017 est.)
0.1% (2016 est.)
3.7% (2017 est.)
0.7% (2016 est.)
Labor force
885,000 (2020 est.)
1.333 million (2020 est.)
Labor force - by occupation
agriculture: 7.7%
industry: 24.1%
services: 68.1% (2016 est.)
agriculture: 9.1%
industry: 25.2%
services: 65.8% (2015 est.)
Unemployment rate
6.14% (2019 est.)
6.51% (2018 est.)
8.4% (2019 est.)
8.5% (2018 est.)
Distribution of family income - Gini index
34.5 (2015)
35.4 (2014)
37.9 (2015)
35 (2014)
Budget
revenues: 11.39 billion (2017 est.)
expenditures: 11.53 billion (2017 est.)
revenues: 15.92 billion (2017 est.)
expenditures: 15.7 billion (2017 est.)
Industries
processed foods, processed wood products, textiles, processed metals, pharmaceuticals, railroad cars, synthetic fibers, electronics
metal-cutting machine tools, electric motors, televisions, refrigerators and freezers, petroleum refining, shipbuilding (small ships), furniture, textiles, food processing, fertilizer, agricultural machinery, optical equipment, lasers, electronic components, computers, amber jewelry, information technology, video game development, app/software development, biotechnology
Industrial production growth rate
10.6% (2017 est.)
5.9% (2017 est.)
Agriculture - products
grain, rapeseed, potatoes, vegetables; pork, poultry, milk, eggs; fish
grain, potatoes, sugar beets, flax, vegetables; beef, milk, eggs, pork, cheese; fish
Exports
$12.84 billion (2017 est.)
$11.35 billion (2016 est.)
$29.12 billion (2017 est.)
$24.23 billion (2016 est.)
Exports - commodities
foodstuffs, wood and wood products, metals, machinery and equipment, textiles
refined fuel, machinery and equipment, chemicals, textiles, foodstuffs, plastics
Exports - partners
Lithuania 15.8%, Russia 14%, Estonia 10.9%, Germany 6.9%, Sweden 5.7%, UK 4.9%, Poland 4.3%, Denmark 4.1% (2017)
Russia 15%, Latvia 9.9%, Poland 8.1%, Germany 7.3%, US 5.2%, Estonia 5%, Sweden 4.8% (2017)
Imports
$15.79 billion (2017 est.)
$13.61 billion (2016 est.)
$31.56 billion (2017 est.)
$26.21 billion (2016 est.)
Imports - commodities
machinery and equipment, consumer goods, chemicals, fuels, vehicles
oil, natural gas, machinery and equipment, transport equipment, chemicals, textiles and clothing, metals
Imports - partners
Lithuania 17.6%, Germany 11.7%, Poland 8.7%, Estonia 7.6%, Russia 7.1%, Netherlands 4.2%, Finland 4.2%, Italy 4% (2017)
Russia 13%, Germany 12.3%, Poland 10.6%, Latvia 7.1%, Italy 5.2%, Netherlands 5.1%, Sweden 4% (2017)
Debt - external
$40.02 billion (31 March 2016 est.)
$38.19 billion (31 March 2015 est.)
$34.48 billion (31 March 2016 est.)
$31.6 billion (31 March 2015 est.)
Exchange rates
euros (EUR) per US dollar -
0.885 (2017 est.)
0.903 (2016 est.)
0.9214 (2015 est.)
0.885 (2014 est.)
0.7634 (2013 est.)
litai (LTL) per US dollar -
0.884 (2017 est.)
0.9037 (2016 est.)
0.9037 (2015 est.)
0.9012 (2014 est.)
0.7525 (2013 est.)
Fiscal year
calendar year
calendar year
Public debt
36.3% of GDP (2017 est.)
37.4% of GDP (2016 est.)

note: data cover general government debt, and includes debt instruments issued (or owned) by government entities, including sub-sectors of central government, state government, local government, and social security funds

39.7% of GDP (2017 est.)
40.1% of GDP (2016 est.)

note: official data; data cover general government debt and include debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities, debt issued by subnational entities, as well as intragovernmental debt; intragovernmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment; debt instruments for the social funds are sold at public auctions

Reserves of foreign exchange and gold
$4.614 billion (31 December 2017 est.)
$3.514 billion (31 December 2016 est.)
$4.45 billion (31 December 2017 est.)
$1.697 billion (31 December 2015 est.)
Current Account Balance
-$222 million (2019 est.)
-$99 million (2018 est.)
$1.817 billion (2019 est.)
$131 million (2018 est.)
GDP (official exchange rate)
$30.33 billion (2017 est.)
$47.26 billion (2017 est.)
Stock of direct foreign investment - at home
$18.84 billion (31 December 2017 est.)
$15.36 billion (31 December 2016 est.)
$20.43 billion (31 December 2017 est.)
$15.87 billion (31 December 2016 est.)
Stock of direct foreign investment - abroad
$3.402 billion (31 December 2017 est.)
$2.485 billion (31 December 2016 est.)
$6.268 billion (31 December 2017 est.)
$4.48 billion (31 December 2016 est.)
Market value of publicly traded shares
$6.76 billion (31 December 2016 est.)
$6.799 billion (31 December 2015 est.)
$7.127 billion (31 December 2014 est.)
$6.76 billion (31 December 2016 est.)
$6.799 billion (31 December 2015 est.)
$7.127 billion (31 December 2014 est.)
Central bank discount rate
0% (31 December 2017 est.)
0.05% (31 December 2015 est.)
0% (31 December 2017 est.)
0.05% (31 December 2015 est.)
Commercial bank prime lending rate
2.58% (31 December 2017 est.)
2.61% (31 December 2016 est.)
2.8% (31 December 2017 est.)
2.83% (31 December 2016 est.)
Stock of domestic credit
$17.27 billion (31 December 2017 est.)
$15.11 billion (31 December 2016 est.)
$36.91 billion (31 December 2017 est.)
$28.55 billion (31 December 2016 est.)
Stock of narrow money
$12.91 billion (31 December 2017 est.)
$10.71 billion (31 December 2016 est.)
$25.61 billion (31 December 2017 est.)
$20.93 billion (31 December 2016 est.)
Stock of broad money
$12.91 billion (31 December 2017 est.)
$10.71 billion (31 December 2016 est.)
$25.61 billion (31 December 2017 est.)
$20.93 billion (31 December 2016 est.)
Taxes and other revenues
37.5% (of GDP) (2017 est.)
33.7% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)
-0.5% (of GDP) (2017 est.)
0.5% (of GDP) (2017 est.)
Unemployment, youth ages 15-24
total: 12.2%
male: 12.5%
female: 11.8% (2018 est.)
total: 11.1%
male: 12%
female: 10.1% (2018 est.)
GDP - composition, by end use
household consumption: 61.8% (2017 est.)
government consumption: 18.2% (2017 est.)
investment in fixed capital: 19.9% (2017 est.)
investment in inventories: 1.5% (2017 est.)
exports of goods and services: 60.6% (2017 est.)
imports of goods and services: -61.9% (2017 est.)
household consumption: 63.9% (2017 est.)
government consumption: 16.6% (2017 est.)
investment in fixed capital: 18.8% (2017 est.)
investment in inventories: -1.3% (2017 est.)
exports of goods and services: 81.6% (2017 est.)
imports of goods and services: -79.3% (2017 est.)
Gross national saving
20.7% of GDP (2017 est.)
21% of GDP (2016 est.)
21.8% of GDP (2015 est.)
18% of GDP (2017 est.)
16.2% of GDP (2016 est.)
17.8% of GDP (2015 est.)

Source: CIA Factbook