Lithuania: in a wind of change Robertas Dargis President of the Lithuanian Confederation of Industrialists 2017 06 15
Lithuanian Confederation of Industrialists - the largest business organisation in Lithuania 50 Sectoral associations 7 Regional associations ~3000 Members 31 Individual member Source: Lithuanian Confederation of Industrialists 2
64% of Lithuania s economy is created by sectors represented by LPK GROSS VALUE ADDED BY SECTORS REPRESENTED BY LITHUANIAN CONFEDERATION OF INDUSTRIALISTS PCT. GROSS VALUE ADDED IN 2015 > 19 bln. Eur 36,4% 63,6% Sectors represented by us Other sectors Manufacturing Transportation and Storage Construction Financial and Insurance activities Accommodation Other sectors JOBS CREATED IN 2015 > 550 thousand jobs EXPORT SHARE IN GDP, 2015 79% (22,6 bln. Eur) Source: Lithuanian Confederation of Industrialists and Lithuanian Department of Statistics 3
Ireland Malta Romania Luxembourg Bulgaria Slovakia Spain Sweden Croatia Cyprus Poland Slovenia Czech Republic Lithuania Netherlands Latvia Hungary EU (28 countries) Germany United Kingdom Estonia Austria Portugal Finland Denmark Belgium France Italy Greece In 2016 Lithuania showed a modest economic growth REAL GDP GROWTH IN EUROPEAN COUNTRIES (2016) PCT. CHANGE 6% 5% 4% 3% 2% 1% 2,3% 2,0% 1,9% 1,6% 0% Source: Eurostat 2017 4
In the I-st quarter of 2017 Lithuania s economy starts to pick up LITHUANIA S REAL GDP GROWTH PCT. LITHUANIA S REAL GDP GROWTH 1Q PCT. 6,0% 4,1% 3,8% 3,5% 3,5% 4,1% 1,6% 1,8% 2,3% 1,8% 2010 2011 2012 2013 2014 2015 2016 2017 1Q 2016 1Q 2017 1Q *Real GDP growth compared to corresponding period of previous year (seasonally and working day adjusted) Source: Lithuanian Department of Statistics 2017 5
22 % of all gross value added in Lithuania is created by Industry GROSS VALUE ADDED CREATED BY INDUSTRY MILLION EUR EMPLOYMENT IN INDUSTRY THOUSAND PERSONS +2,3% 7 493 7 449 7 630 7 580 7 668 +3,5% 238,5 6 931 222,6 230,3 230,5 226,6 229,6 2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016 Source: Lithuanian Department of Statistics 2017 6
Industrial production capacity utilization is high INDUSTRIAL PRODUCTION (VAT AND EXCISES EXCLUDED)* MILLION EUR INDUSTRIAL PRODUCTION CAPACITY UTILIZATION LEVEL PCT. 3 416,9 77,1% 3 140,8 75,8% 75,6% 76,6% 76,1% 76,3% 3 006,7 75,6% 2015 1Q 2016 1Q 2017 1Q *Manufacturing excluded refined petroleum products (constant 2010 prices) Source: Lithuanian Department of Statistics 2017 7
Despite that Russia remains our top export destination, only 9% of exported goods are of Lithuanian origin TOP 10 DESTINATIONS OF LITHUANIAN GOODS EXPORT IN 2016 MILLION EUR 3 049,1 708,4 871,8 962,3 1 075,5 1 168,1 1 199,4 1 737,8 2 051,5 2 228,6 Export of goods of Lithuanian origin Re-export Source: Lithuanian Department of Statistics 2016 8
In 2016 Lithuanian producers entered new markets in Asia and USA EXPORTS OF GOODS* (EXLUDING MINERAL FUELS) GROWTH IN 2016 PCT. 178,0% 73,8% 0,9% 7,2% 23,7% 23,6% EU Asia CIS Russia Ukraine USA China India Japan -13,2% -9,3% -19,8% *Exports of goods of Lithuanian origin CIS Commonwealth of Independent States Source: Lithuanian Department of Statistics 2016 9
TOP 10 goods exported by Lithuania s producers LITHUANIAN GOODS EXPORT STRUCTURE 2016 PCT. 43% 14% 8% 8% Mineral fuels Machinery and mechanical appliances Furniture Electrical machinery equipment and parts Plastics and articles thereof Vehicles, parts and accessories 3% 3%4% 4% 6% 7% Wood and articles of wood Pharmaceutical products Fertilizers Others Source: Lithuanian Department of Statistics 2016 10
In the I st. quarter of 2017 goods export to the United Kingdom decreased by 11% LITHUANIA S GOODS EXPORT 2017 1 QUARTER COMPARED TO THE PREVIOUS YEAR PCT. 40% 35% 34% 33% 30% 25% 20% 15% 10% 5% 22% 19% 10% 8% 16% 26% 5% 0% -5% -10% -15% -11% Source: Lithuanian Department of Statistics 2017 11
Decline of goods export to United Kingdom was mainly influenced by the decrease of GBP value GOODS EXPORT TO UNITED KINGDOM MILLION EUR GBP / EUR EXCHANGE RATE -10,6% 254,7 44,2 227,6 39,4 210,5 188,3 2016 1Q 2017 1Q 1,5 1,45 1,4 1,35 1,3 1,25 1,2 1,15 1,1 1,05 1-10% 2015 2016 2016-06-23 2017 Re-export Export of goods of Lithuanian origin Source: Lithuanian Department of Statistics 2017 12
LPK Brexit working group Prepared foodstuffs Wood Effect evaluation Recommendations for negotiations Textile Brexit WG Furniture Pharmaceuticals Plastics Qualitative and quantitative surveys and further assessment of export trends Source: Lithuanian Confederation of Industrialists 13
Global Competitiveness Index (Lithuania s rank) Source: The Global Competitiveness Index 2016-2017 14
Global Competitiveness Index (Lithuania s rank) (II) RANK 2015 2016 Global competitiveness index 36 35 Ease of access to loans 91 53 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 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 Source: The Global Competitiveness Index 2016-2017 15
Higher education reform the most important job for the government WHAT SHOULD BE THE PRIORITIES OF THE GOVERNMENT? Healthcare Financial market development 13,3% 9,2% 23,3% Higher education and training Labor market efficiency 16,7% Technological readiness 17,5% 20,0% Foreign relations Source: Lithuanian Confederation of Industrialists 16
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 Industrialists 17
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