On 22 January 2010, Secretary of Homeland Security Janet Napolitano designated Lithuania as one of 11 new countries whose citizens are eligible to participate in the H2-A and H2-B non-immigrant visa programs.

These programs allow U.S. employers to bring foreign nationals to the US to fill temporary or seasonal jobs for which American workers are not available.

Before applying for a temporary worker visa at a US Embassy, applicants must obtain an approved petition from the Department of Homeland Security (DHS). The petition must be submitted by the applicant’s prospective employer to DHS no earlier than 6 months before the proposed employment start date.For more information about the H2-A or H2-B visas please visit the US Embassy website at: http://vilnius.usembassy.gov/non-immigrant_visas.html under “Information for Temporary Workers” link.

• Photo: Kęstutis Jankauskas (ELTA)

Vilnius, Feb 1 (ELTA) - The Lithuanian Ministry of Energy has chosen five potential strategic investors that could participate in the building of the new nuclear power plant. According to Minister Arvydas Sekmokas, 25 energy companies expressed an interest in the project.

In April all five selected companies are to submit non-binding proposals for participation in the building of the new nuclear power plant. It is planned that by the middle of summer only two companies will remain, and finally, one strategic investor will be chosen.

Sekmokas did not reveal which five companies were selected after the first round because of confidentiality agreements.

The key criteria for a strategic investors was experience in the nuclear sector, the execution of big energy projects and financial requirements.

According to Sekmokas what technology will be used in the Visaginas plant will only become clear after the investor is chosen. It is planned that the strategic investor will be offered 51 percent of the nuclear power plant shares. The new nuclear power plant will cost €3-5 billion.

In January 2009, 93% of enterprises with ten or more employees had access to the internet in the EU27 and 82% had a broadband internet connection.

Among other uses, internet access ena-bles enterprises to buy and sell products electronically: in the EU27 in 2008, 12% of turnover was generated from e-com-merce, according to Eurostat.Almost all enterprises in Finland, Denmark, Austria and Slovakia have internet access In January 2009, the highest proportion of enterprises with internet access in the EU27 were recorded in Finland (100%), Denmark, Austria and Slovakia (98%) and Germany (97%).

The percentage was less than 90% in only six Member States: Romania (72%), Bulgaria (83%), Latvia and Hungary (87%), Cyprus (88%) and Greece (89%). The proportion of enterprises with a broadband connection in January 2009 was above 90% in Finland (94%), Spain and Malta (93%) and France (92%). Only in Romania (40%), Lithuania (57%) and Poland (58%) did less than 60% of enterprises have a broadband connection.

How well-equipped are European companies to meet the challenges of global competition and the recent recession? The 2009 European Company Survey provides some clues.

Eurofound an EU research agency based in Dublin, surveyed 27,000 public and private-sector employers across the 27 EU countries and Croatia, Turkey and the former Yugoslav Republic of Macedonia.

The main results are not due out until March. But the first findings show many companies use hiring, pay and work policies that are flexible - that is to boost their ability to respond to changes in the business climate. Labour market flexibility is a key element of the EU’s strategy for making Europe more dynamic and competitive.

About two out of three companies use freelancers or other forms of temporary help, and more than half employ at least one person on a fixed-term contract.

Part-time work has also become more widespread. Two-thirds of the companies questioned offer part-time work but part-timers in highly skilled positions are still uncommon.

Just over a third of employers offer performance-related pay, while just 14% of the private firms surveyed have profit-sharing schemes.

Flexibility cuts both ways. About 56% of European companies now let employees vary their work hours to suit personal schedules - up from 48% five years ago.

The U.S. company Moog Medical Devices, which owns the Lithuanian company Viltechmeda, will invest an-other €4 M in Lithuania to establish its major European scientific research and technology development centre in the nearest future. Moog Medical Devices will employ 50 Lithuanian professionals in the new establishment based in the science and business valley Santara located in the capital city. The centre will focus on the development of medical technologies and innovations. Moog Medical Devices, a part of the international Moog Inc group, acquired a 100% holding of the Lithuanian com-pany Viltechmeda for €15 M in January 2009.

From 22 January to 19 February of this year Ūkio bankas will offer medium-term (369 days) bonds in euro with the fixed annual return of 5%. The nominal value of one bond is EUR 100. The accrued interest will be paid at maturity on 24 February 2011.

Ūkio bankas bonds will be available from all the bank’s branches and units, as well as from the electronic banking system Eta bankas.

According to the forecasts of Swedbank analysts, the economic recession in Lithuania is to be over in the second half of 2010; however, the rate of recovery will depend on the situation in export markets and on the government’s ability to manage the growing debt and reduce taxes. Although in the second half of the year the economy is expected to grow, the country’s GDP this year will balance at the level of 2009. In 2010, the unem-ployment rate will reach its peak; while exporters will recover gradually, busi-ness oriented to domestic consumption will continue to experience the burden of the crisis. In 2011, the country’s GDP is expected to grow by a modest 3%. These forecasts are given in the most recent macroeconomic overview of Sweden and Baltic states prepared by Swedbank.

Some of the most innovative projects of the European Union Structural Funds will be presented during the RegioStars 2010 Awards in Brussels.

Lithuania is represented by three success stories: Computer literacy training by Association Langas į ateitį, social integration in the restaurant Mano Guru and website www.esparama.lt

The RegioStars awards are given for the most successful EU-funded projects which are being implemented by applying the best ideas, progressive and innovative methods. These awards are made by the European Commission. 87 projects from 27 EU Member States were nominated for RegioStars 2010 Awards. The RegioStars Jury chose 24 finalists, who presented their projects 27 January.

“Computer Literacy Basics for Lithuanian E-citizens” implemented by “Langas į ateitį”, the work rehabilitation project initiated by Public Institution Social Assistance Projects implemented along with a popular salad bar Mano Guru in Vilnius, and EU structural assistance website www.esparama.lt were established during the 2004–2006 financing period and have not only reached their goals and met the criteria established by the RegioStars Jury, but also are unique due to their wide scope, continuity, popularisation of partnership ideas and created value added.

The project designed for modern social rehabilitation being implemented in salad restaurant Mano Guru in Vilnius has been nominated for RegioStars 2010 Award category “City Star: the integration of migrants or marginalised groups in urban areas”.

The oasis of healthy food opened in Vilnius five years ago distinguishes itself not only for its healthy food , but also for its staff. Some of the staff of Mano Guru have successfully overcame dependence and undergo work rehabilitation – the integrated rehabilitation method is highly popular abroad, but only recently introduced in Lithuania. In 2009 Mano Guru was voted the most hospitable café in Vilnius.

In the Information and Communication category the project implemented by Langas į ateitį has been selected. In the name of one goal to provide fundamentals of computer literacy to economically active residents of Lithuania – it developed partnerships between the government and the leaders of Lithuanian telecommunications, banking and internet business. During the project implementation computer literacy fundamentals were provided to 50,400 adults.

In RegioStars 2010 Information and Communication category “Websites offering quality information and showing the European added-value” the EU structural assistance website www.esparama.lt has been nominated, which is administered by the Ministry of Finance and 14 other EU assistance administering institutions. This website is the basic source of information on EU structural assistance to Lithuania updated on daily basis.

One more project which will participate in the presentation by the finalists is INTERREG project “Establishment of Multi-centres in Marijampolė and Olshteen” being implemented by Lithuania together with Poland, which aims at instalment of computer rooms and e-libraries in public libraries of the aforementioned towns. The basic operator of this project is the public library of Olshteen in Poland and the partner of the project is public library of Petras Kriaučiūnas in Marijampolė.

The Awards Ceremony will take place in May 2010 in Brussels.

The first solar cell production line was opened in Vilnius on 26 January. Modernios E-technologijos (MET) and Precizika Metrology (PM) invested €2.9 million into the project.

Dainius Kreivys, the Minister of Economy, participated in the opening of the production line and expressed his hope that this was the birth of the totally new sector in Lithuania’s economy, which could grow into a significant industry and would become a pillar of growth.

“It is estimated that the clean-tech sector is creating seven times more of added value than traditional industries. I hope that this investment will become a great example of how high technology is becoming an every day reality in Lithuania’s industry,” said Mr. Kreivys during the opening ceremony of the factory.

According to Precizika Metrology CEO Algimantas Barakauskas, it is estimated that the line should generate about €5.8 million in the annual revenue, even though the 2010 revenue might reach €2.9 million.

New Flights from Star1

From 28 March 2010, Star1 will offer direct flights from Vilnius to Edinburgh on Thursdays and Sundays, and from 7 May on Fridays and Sundays. Star1 will also be adding a direct Girona flight in May, on Thursdays and Sundays, and will resume its Dublin – Vilnius service on Tuesdays, Thursdays and Saturdays from 29 May.

airBaltic and Reval Hotels Join Forces in Co-branding

airBaltic and Reval Hotels have announced extended co-operation. The companies will join forces under the “Reval Hotels, Member of airBaltic Hotels” brand, in order to differentiate and better promote their services and high standards. This kind of co-branding exercise is the first of its scale in the region, and leverages business for both companies in the Baltic region, Russia, Scandinavia and Western European markets.

Customers of both companies will have an opportunity to experience seamless and high quality travel service. Both companies will reciprocally market each others services.

Star1 Holidays reaches turnover of 24m litas in H1

Vilnius, Jan 19 (ELTA) - Star1 Holidays, the new tour operator which entered Lithuania’s tourism market in the middle of last year, served over 15,000 clients in its first six months of activities in Lithuania. The company reached a turnover of LTL24 million (€6.9528 million).

According to Star1 Holidays communications head Jurate Rupšienė, the most popular resort in 2009 was Turkey which accounted for 43% of Star1 Holidays destinations. Greece was next at 21%, 20% travelled to Egypt and the remainder chose resorts in Spain, Bulgaria and Tunis.

Presently, the company has about 30% market share in Lithuania.

Number of passengers served by Lithuanian airports down this year

Vilnius, Jan 22 (ELTA) - In 2009, the number of passengers arriving and departing from Lithuania’s airports was 1.9 million, a decrease of 26.8% year on year.

According to the Department of Statistics, the majority of passengers were from the United Kingdom (17.1%), Latvia (12.6%), Germany (9.9%), Ireland (8.5%) and Denmark (8.9%).

Compared to 2008, the number of passengers going to and from Latvia increased almost three fold due to changed flight scheduling. The number of passengers going to and from the United Kingdom decreased by 10.2%, Denmark by 25%, Germany - 28.7%, Ireland - 32.8%.

In 2009, Lithuanian airlines transported a total of 675,000 passengers, a decrease of 41.9% year on year.

airBaltic to Launch Four New Routes from Vilnius

airBaltic will launch new flights from Vilnius to Dublin, Hamburg, Manchester, and Oslo, thus offering already 13 direct flight routes from Vilnius. airBaltic will start direct flights to Dublin on March 29, to Hamburg on March 30, and to Manchester on March 31. The airline will operate the first flight to Oslo on May 17.

Tero Taskila, Chief Commercial Officer of airBaltic: “After profitable year 2009 and with a positive outlook for 2010, airBaltic is expanding the network of direct routes from Vilnius to strengthen our position in Lithuania.”

EIF and Šiauliu Bankas signed an agreement under which Šiauliu Bankas will provide loans worth €40 million (over LTL138 million to) Small and Medium sized Enterprises (SMEs) in Lithuania.

Šiauliu Bankas will manage the newly created Funded Risk Sharing product under the JEREMIE initiative, designed to stimulate lending from banks to SMEs over a two year period.

The EIF will provide €20 million to Šiauliu Bankas, which will be matched by an equal amount from the bank, therefore totalling €40 million. This transaction enables Šiauliu Bankas to accelerate lending to Lithuanian SMEs during the current economic recession.

Richard Pelly, Chief Executive of the European Investment Fund stated: “This agreement is very good news for Lithuanian SMEs and will enable increased lending to this important sector of the economy.

“Šiauliu Bankas was chosen to implement this initiative following a detailed selection process. It is the only local bank in Lithuania to be selected for this purpose which reflects the strength of its management and its ability to provide enhanced access to finance for SMEs.

Šiauliu bankas will begin lending to Lithuanian enterprises in the first quarter of 2010 with an expectation that the full amount will be lent within a two year period.

About JEREMIE

JEREMIE (Joint European Resources for Micro to Medium Enterprises) is a joint initiative launched by the European Commission (DG Regional Policy) and the European Investment Bank group to improve access to finance for SMEs in the EU within the Structural Funds framework for the period 2007 - 2013.

London, Jan 29 (LETA-ELTA) - The economic downturn has made it harder to speak sensibly of a region called “Eastern Europe”, The Economist wrote.

It was never a very coherent idea and it is becoming a damaging one, the article says. “Eastern Europe” is a geographical oddity that includes the Czech Republic (in the middle of the continent) but not Greece or Cyprus (supposedly “western” Europe but in the far south-east). It makes little sense historically either: it includes countries (like Ukraine) that were under the heel of the Soviet empire for decades and those (Albania, say) that only brushed it. Some of those countries had harsh planned economies; others had their own version of “goulash communism” (Hungary) or “self-managed socialism” (Yugoslavia).

The nearly 30 states that once, either under their own names or as part of somewhere else, bore the label “communist” now have more differences than similarities. Yet calling them “Eastern Europe” suggests not only a common fate under totalitarian rule, but a host of ills that go with it: a troubled history then; bad government and economic misery now.

The economic downturn has shown how misleading this is. Worries about “contagion” from the banking crisis in Latvia raised risk premiums in otherwise solid economies such as Poland and the Czech Republic - a nonsense based on outsiders’ perceptions of other outsiders’ fears.

Ten “eastern” countries that joined the EU are in so bad a mess. They include hotshots and slow-coaches, places that feel thoroughly modern and those where the air still bears a rancid tang from past misrule.

Slovenia and the Czech Republic, for example, have overhauled living standards in Portugal, the poorest country in the “western” camp. Neither was badly hit by the economic downturn. Together with Slovakia, Slovenia has joined the euro, which Sweden, Denmark and Britain have not. Estonia - at least in outsiders’ eyes - is one of the least corrupt countries in Europe, easily beating founder members of the EU such as Italy.

Ten countries that joined in the big enlargement of 2004 and in the later expansion of 2007. They are a mixed bunch, ranging from model EU citizens such as Estonia (recently smitten by a property bust, but all set to gain permission this year to join the euro) to Romania and Bulgaria, which have become bywords in Brussels for corruption and organised crime respectively. Eight of them (Romania and Bulgaria are the exceptions) have already joined Europe’s Schengen passport-less travel zone. Most (Poland is a big, rankling exception) also have visa-free travel to America.

Four countries - Poland and the three Baltic states - worry a lot about Russian revisionism (or revanchism). Hungary, the Czech Republic and Slovakia are concerned too, but more about energy and economic security than military sabre-rattling. Yet elsewhere, in the former Yugoslavia for example, such fears seem mystifying and even paranoid.

The new and future members also share capital-thirstiness. All need lots of outside money (from the EU’s coffers, from the capital markets and from foreign bank-lending) to modernise their economies to the standards of the rest of the continent.

But the usefulness of the “new member state” category is clearly declining as the years go by. Oxford University still has a “New College” which was a good label in 1379 to distinguish it from existing bits of the university. It seems a bit quaint now. Poles, Czechs, Estonians and others hope that they will drop the “new” label rather sooner, so that they can be judged on their merits rather than on their past.

Klaipėda, Dec 31 (ELTA) - According to estimates, the second best result of cargo loaded at Klaipėda seaport in the history of the port was achieved in 2009 - 27.7 million tonnes of sea cargo.

According to the communication report of the Klaipėda State Seaport Authority, the volume of cargo at the seaport loaded since May exceeded expected results as well as the results of 2008. The amount of cargo loaded in 2009 was higher by 4.1% than in the strategic plan of activities of the Klaipėda State Seaport Authority for 2009-2011.

A record volume of cargo was loaded at Klaipėda in December 2009. Even before the end of the month, 2.62 million tonnes of sea cargo were loaded, an increase of a fifth (20.4%) compared to December 2008.

The 2010 EU budget will see jobs and the economy top spending. Over €64bn (or 45%) of the €141bn of EU funds will go on measures linked to research, education and innovation.

Research funding will grow by nearly 12% (€7.5bn) and energy and transport by more than 10% (€2bn).

Financing for strategic energy projects, broadband in rural areas and cash to help rural communities cope with new challenges in agriculture will also provide a welcome boost to Europe’s economy with the final €2.4bn of the €5bn European economic recovery plan being secured for 2010. Agricultural spending will continue to be stable next year at nearly €44bn with over €14bn (+2.6%) to promote rural development and additional emergency aid of €300m to help milk producers.

The biggest increase in EU spending in 2010 will be for projects to fight crime, terrorism and manage migration flows, with this area growing by 16.2% on 2009 to almost €1bn.

Speaking in the European Parliament after the vote on the 2010 EU budget, Algirdas Šemeta, EU Commissioner for Financial Programming and Budget said: “The 2010 budget is a recovery budget. It’s about getting ready for better times, maintaining jobs, stimulating growth”.

Speaking to the media Commissioner Šemeta added: “Despite the difficult economic situation, the 2010 budget guarantees the financial resources to keep EU programmes on track and focused on areas linked to recovery. The fastest growing areas are the ones most geared to an upturn like innovation, research or the financing of energy links, where spending is increasing faster than the budget itself .”

Boosting the integration of the EU-12 into cohesion policy Cohesion funding will grow in 2010 with €49.4bn going directly to the EU-27, a 2% rise compared to 2009.

The trend to phase-in funding for the Member States that joined the EU in 2004 and 2007 (EU-12) will continue and, for the first time ever, these countries will receive the biggest share of the EU’s Cohesion and Structural Funds (52%). The European Social Fund will account for €10.8bn in 2010 to support people and businesses helping 9 million companies and citizens through training and education programmes.

Vilnius, Dec 31 (Bloomberg-ELTA) - Lithuania’s economic sentiment fell in December for a third month, a survey showed, after lawmakers approved further austerity measures for next year.

The confidence index, which measures expectations for manufacturing, construction, retail and service industries as well as gauging consumer sentiment, fell to -33 from -31 in November, the Department of Statistics said on its website on Thursday. The rate was -36 in December 2008.

Lithuania is coping with the worst recession since the early 1990s when the country gained independence from the Soviet Union and switched to a market economy from a central planning system. The government has introduced spending cuts equivalent to about 8% of estimated gross domestic product this year, stifling demand for goods and services.

The industrial confidence index fell to -32 from -31 in November, while the services confidence index dropped to -13 from -8 in the previous month, the statistics office said. Retail confidence worsened to -42 in December from -35 in the previous month. Consumer confidence rose to -50 from -51 in November.

According to figures from Maxima, the Christmas and New Year food sales for this year were 10% down on last year, but this was not as much as most Lithuanians themselves had forecast.

There was an increase in sales of products used for cooking at home, and presents tended to be more practical. Shoppers treated themselves to products like fresh fruit, vegetables, sweets and sparkling wine.

“Comparing this year’s festive season to last, our takings were down 14%, but this was still a better result than expected. Even though people were planning to save more over the holidays, it seems once they got around to shopping they couldn’t help treating themselves and their loved ones. There was also an increase in sales of special products of which a percentage of the sale price goes to the disadvantaged in our society,” said Saulius Jonaitis, Maxima LT Marketing and Sales Director.

The sale of eggs rose 14% in the holiday season, while margarine, mayonnaise, chocolate and other sweets sold at the same rate as last year. The sale of fresh fish was down 10% and fresh meat was down 8%, nuts down 30%, prepared cakes and sweets down 27%, marinated and preserved products down 20%.

Over New Year the sale of fresh fruit and vegetables rose 20%, while the sale of processed meat for platters and baked dishes rose by a factor of ten.

Cheaper presents were most popular; items like household goods, cooking implements, hair care products and cosmetics were big sellers. The sale of lottery tickets rose 9% before Christmas and 23% before New Year. The sale of books rose 20%.

Alcohol sales were down 16% and Maxima said they noted that there were higher sales of wines and less of strong spirits. Leading up to New Year there was a 6% increase in the sale of cheaper sparkling wine.

Star1 adds another London flight

Star1 will add an extra flight from London in April, meaning there will soon be direct flights between Vilnius and London every day of the week excluding Sundays.

Kaunas Airport Growth Continues

In 2009, Kaunas International Airport handled 456,700 passengers, an increase of 11.34% over 2008, the largest ever number of passengers to use the airport.
In 2009 the number of flights increase 5.8% to a total of 6027, carrying 2071.3 tonnes of postal cargo, a decrease of 37% over 2008.

The most popular destination was London with 220,000 passengers flying to London’s Standsted and Luton airports.

December was the busiest month with 41,565 passengers, which was 42.8% more than last year.

Kaunas International Airport now offers eight direct flights to eight European cities, and indirect flights to 60 cities.

Aer Lingus expected to cut Vilnius flights

Less than a year after establishing a base at England’s Gatwick Airport, Aer Lingus is cutting back the number of aircraft based there from three to five.

The reduced capacity means flights to Vilnius are expected to be cut from the end of March 2010.

Flick admits Vilnius Airport is now competing with Riga

Riga, Dec 28 (NOZARE.LV-ELTA) - Vilnius Airport is actively working to attract airlines and is reducing tariffs to make them more competitive against other airports, including Riga, President and co-owner of airBaltic, Bertolt Flick told LETA.

airBaltic is also planning to begin direct flights from Vilnius to London’s Gatwick, as well as adding another flight to Paris.

SAS resumes flights to Vilnius

On Monday 11 January SAS resumed its direct flights between Vilnius and Copenhagen. A new CRJ900 NextGen jet has been assigned the route and it will make two trips a day, or 14 flights each week. SAS continue their service from Palanga.

KLM & Estonian Air join forces

Starting from 12 February 2010, Estonian Air and KLM Royal Dutch Airlines will start code share cooperation on Estonian Air flights on Amsterdam-Vilnius-Amsterdam route.  Estonian Air will serve the route as a through flight to/from Tallinn with six weekly frequencies on Mondays, Tuesdays, Wednesdays, Thursdays, Fridays and Sundays.

GetJar, the world’s largest cross-platform app store based in Lithuania, the US and the UK, was announced the winner of the prestigious Mobile Excellence Award for Best Mobile Service.

The Mobile Excellence Awards is the industry’s leading and most influential awards program and honours innovation, creativity and excellence in mobile entertainment. This year, GetJar was selected for its innovative premium advertising system, Pay-Per-Download (PPD) that allows developers and brand owners to bid for premium visibility and drive downloads for their apps on the GetJar mobile app store. Additionally, GetJar is closing in on the billion download mark, making it the second largest app store in the world.

“It’s a tremendous honour to be recognized as a leading mobile app store and we share the credit with our developers and partners,” said GetJar CEO, Ilja Laurs.

Ilja Laurs, founder and CEO of GetJar Networks, was listed one of the 40 most influential leaders in the world’s mobile communication industry in 2009. He is the first Lithuanian included on the list published by the Informa Telecoms & Media.

GetJar is also the recipient of the 2009 Meffy Award for Best Direct to Customer Service.

Statistics Lithuania informs that, based on provisional data, foreign direct investment (FDI) in Lithuania as of 1 October 2009 amounted to LTL34.2 billion, which is 3.3% more than 1 July 2009 (LTL33.1 billion) and by 0.7% more than 1 October 2008 (LTL34.0 billion). FDI per capita amounted to LTL10,259 (as of 1 October 2008, LTL10,134). 

The largest investors were Swedish – LTL4.18 billion (12.2% of total FDI), German – LTL3.61 billion (10.6%), Danish – LTL3.6 billion (10.5%), Polish – LTL3.42 billion (10%), Russian – LTL2.31 billion (6.8%) and Estonian – LTL2.29 billion (6.7%). Over III quarter 2009, FDI from Russia, Denmark and Germany increased most (34.6, 18.9 and 11.2% respectively), while FDI from Sweden decreased by 15.4%.

Direct investment from EU-27 countries amounted to LTL27.0 billion (78.9% of total FDI), from CIS countries – LTL2.52 billion (7.4%).

As of 1 October 2009, the largest investment was made in manufacturing – 26.6%, real estate, renting and business activities – 15.1%, transport, storage and communication – 14.7%, financial intermediation – 14.3%, wholesale and retail trade – 13% of total FDI. In III quarter 2009, the largest increase was observed for direct investment in mining and quarrying (52.2%) and electricity, gas and water supply (25.6%). 

In manufacturing, the largest investment was made in the manufacture of petroleum and chemical products – LTL4.73 billion (51.9% of total investment in manufacturing), food products, beverages and tobacco – LTL1.58 billion (17.3%).

According to the International Living 2010 Quality of Life Index, the quality of life in Lithuania is one of the highest among the new EU-12 members and ranks higher than Sweden, Great Britain and Greece.

Lithuania is 22 in the Index, with an overall final score of 73 points, while France, Australia, Switzerland, Germany and New Zealand make up the top 5. Estonia, Poland and Latvia are ranked No. 32, 35 and 40, respectively.

Lithuania scored highest in the categories of citizens’ civil and political rights as well as safety (100 points), living environment in terms of population density and environmental pollution (81 points), as well as climate (79 points, same as Greece, Spain and Costa Rica). Cost of living in Lithuania (63 points) is also very competitive comparing to most of other countries.

Luxembourg, Jan 7 (ELTA) - In the third quarter of 2009, Lithuania’s gross domestic product (GDP) increased by 6.1% compared with the previous quarter. In the Q3 of 2009, compared with the Q3 of 2008, the country’s GDP slumped by 14.2%, according to the second estimates from Eurostat, the Statistical Office of the European Communities.

Euro area (EA16) GDP increased by 0.4% and EU27 GDP by 0.3% during the third quarter of 2009, compared with the previous quarter. In the second quarter of 2009, growth rates were -0.1% in the euro area and -0.3% in the EU27.

In comparison with the same quarter of the previous year, seasonally adjusted GDP declined in the third quarter of 2009 by 4.0% in the euro area and by 4.3% in the EU27, after -4.8% and -5.0% respectively in the previous quarter.

In the third quarter of 2009, among Member States for which seasonally adjusted GDP data are available, Lithuania (6.1%) recorded the highest growth rate compared with the previous quarter, followed by Luxembourg (4.2%) and Slovakia (1.6%).

In the third quarter of 2009, household final consumption expenditure decreased by 0.1% in the euro area and by 0.2% in the EU27 (after +0.1% and -0.2% respectively in the previous quarter). Investments fell by 0.8% in the euro area and by 0.6% in the EU27 (after -1.6% and -2.5%). Exports increased by 3.1% in the euro area and by 2.7% in the EU27 (after -1.2% and -1.4%). Imports increased by 3.0% in the euro area and by 2.9% in the EU27 (after -2.8% and -2.9%).

Among the main partners of the EU, GDP increased by 0.6% in the US in the third quarter of 2009 (-0.2% in the previous quarter). In Japan GDP increased by 0.3% in the third quarter of 2009 (+0.7% in the previous quarter).

Compared with the third quarter of 2008, GDP declined by 2.6% in the US (-3.8% in the previous quarter) and decreased by 4.7% in Japan (-6.0% in the previous quarter).

In November 2009, compared with October 2009, the volume of retail trade fell by 1.2% in the euro area (EA16) and by 0.8% in the EU272. In October retail trade rose by 0.2% and 0.5% respectively.

In November 2009, compared with November 2008, the retail sales index decreased by 4.0% in the euro area and by 2.1% in the EU27.

Monthly changes

In November 2009, compared with October 2009, “Food, drinks and tobacco” declined by 0.4% in both zones. The non food sector fell by 1.6% in the euro area and by 1.0% in the EU27.
Among the Member States for which data are available, total retail trade fell in fifteen and rose only in Poland (+1.0%) and the United Kingdom (+0.2%). The largest decreases were observed in Lithuania (-4.8%), Estonia (-3.1%) and Latvia (-2.3%).

Annual changes

In November 2009, compared with November 2008, “Food, drinks and tobacco” fell by 2.9% in the euro area and by 1.6% in the EU27. The non food sector dropped by 4.2% and by 1.7% respectively.

Among the Member States for which data are available, total retail trade fell in twelve, rose in four and remained stable in Finland. The largest decreases were observed in Latvia (-30.2%), Lithuania (-27.8%) and Estonia (-21.2%), and the highest increases in Poland (+4.6%) and Belgium (+3.7%).

Vilnius, Jan 8 (ELTA) – During December the unemployment rate increased, though the number of jobseekers registered at territorial labour exchanges dropped by 7.3% compared to November. The labour exchanges in December registered almost 27,700 jobseekers.

On 1 January almost 269,000 unemployed people were registered on the database of the Lithuanian Labour Exchange, which accounted for 12.5% of the Lithuanian working-age population - an increase of 0.8% month-on-month. Since the beginning of this year, there have been 369,400 jobseekers added to the database of the Lithuanian Labour Exchange.

The highest unemployment was recorded in Ignalina district (17.7%), the municipalities of Akmenė (17.6%), Druskininkai (17.5%) and Mažeikiai (16.9%), while the lowest unemployment rates were in the municipalities of Neringa (4%) and Elektrėnai (8.1%), and Trakai district and Kazlų Ruda municipality (8.8% each). With regard to the major cities, the highest number of the unemployed were registered in Panevėžys (15.4%), while there were fewest jobseekers in Kaunas (11%).

In December 2009, 8,400 people were employed through labour exchanges. Almost 3,000 jobseekers were sent to active labour market policy measures.

According to the data obtained by the Lithuanian Labour Exchange, since the beginning of 2009, 121,800 jobseekers were employed with the help of labour exchanges.

Vilnius, Dec 30 (ELTA) - As the pace of unemployment growth slows, the Lithuanian Labour Exchange (LDB) predicts that unemployment will not increase significantly in 2010. It is expected that next year the unemployment rate will grow by 2-3% on average. In 2009, the unemployment rate grew 9%.

The last week of 2009 was marked by the smallest increase (0.15%) in unemployment in Q4, which gave grounds for optimism with regard to the coming year. Moreover, the LDB forecasts that companies will no longer sack their employees as they have ended staff optimisation.

According to LDB experts, the favourable tendencies in the labour market were determined by the effective use of money from the European Social Fund and the European Globalisation Adjustment Fund.

Vilnius, Dec 30 (ELTA) - According to data from the Finance Ministry, in November, the revenues of the central government sector totalled LTL2.218 billion (€642.5 million), its expenditures amounted to LTL2.689 billion (€779 million), and transactions with non-financial assets stood at LTL226 million (€65.46 million).

In November, the deficit (net borrowing) reached LTL697.1 million, which accounted for 0.8% of the GDP projected for 2009.

In the previous month, most revenues came from taxes (44.2%) and social contributions (41%). The major part of expenditures was allocated for social benefits (56%).
Over the past 11 months of 2009, revenues of central government totalled LTL25.36 billion (€7.346 billion), its expenditures stood at LTL30.68 billion (€8.88 billion) and transactions with non-financial assets amounted to LTL1.626 billion (€471 million).

Over the said period, the deficit of the central government sector totalled LTL6.943 billion (€2.01 billion) or 7.6% of GDP: the state budget deficit reached LTL3.718 billion (€1.077 billion), the deficit of non-budgetary funds amounted to LTL481.3 million (€139.425 million) and the deficit of social security funds stood at LTL2.743 billion (€794.6 million).

Prime Minister Kubilius puts his spin on the newly approved budget

SEIMAS ADOPTED THE 2010 BUDGET. The Government had approved on measures to cut budget expenditure and raise revenue, which resulted in cutting the budget deficit by more than LTL2 billion (down to LTL4,930 million, or 5.9% of GDP).

Appropriations for state budget managers and programme implementation have been cut by approximately 33% in the 2010 budget, including 23% cuts in public administration expenditure, 10% reduction of salary for public servants, politicians, public officials, and municipal servants, 5% reduction of salary for teachers, military servants, and employees in the social sector and culture, and 2% cuts in salary for statutory officials.

Furthermore, the number of budget appropriation managers will be reduced by 30 in 2010 as compared to 2009. All these measures have reduced the planned national budget expenditure by LTL1,581 million as against the 2009 budget reviewed in July 2009.

The 2010 budget revenue, including funds from the European Union and other sources of international financial support, will amount to LTL24,398.9 million. Planned 2010 national budget appropriations total LTL29,328.8 million.

EU assistance funds, which at this difficult time of the economic recession will be invested in all the segments of the economy with a view to maintaining business and jobs and a healthy economy, will amount to LTL7,891.9 million, which is LTL1,474.5 million up on 2009.

Prime Minister Kubilius pointed out that the budget is not cheerful news, but it is down to earth and not trying to hide the real situation in Lithuania. According to the Prime Minister, this budget reflects his responsibility and solidarity with countrymen who live a tough life now.

Following the adoption of the budget, the Prime Minister thanked the Lithuanian people, “who have a really heavy burden of coping with this crisis, caused by the faults of us all, the previous governments, and of course the global crisis. People who have difficulties facing current problems, but who see that indeed the decisions must be made”.

The Prime Minister also expressed his appreciation to the Finance Minister Ingrida Šimonytė and the entire ministry, as well as to Speaker of the Seimas Irena Degutienė for their good work, and to President Dalia Grybauskaitė for her support which is of utmost importance at this difficult period of time not only for the Government and the Seimas, but for Lithuania as a whole.

Lithuania is bringing in one of the lowest corporate tax levies in the EU. An amendment to the Law on Corporate Tax that was passed by Parliament on Wednesday and has reduced the 2010 corporate profit tax rate to 15%, down from 20% in 2009 (5% for small businesses, down from 13% in 2009.)

According to research carried out by the Ministry of Finance, these new rates will not have any significant adverse effects on tax receipts.

These tax reductions will promote entrepreneurship and, importantly, send a strong welcome signal to potential foreign investors.

Europeans cautiously optimistic about the economy, but remain concerned about unemployment – Autumn 2009 Eurobarometer

The first results of the latest Eurobarometer survey reveal that for Europeans unemployment is the most important issue facing their own country, while concerns about the economic situation have lessened slightly. However, a majority still believes the worst of the crisis is to come. Now that the G20 and the IMF have given the impetus for economic recovery, people believe that national governments and the European Union are best placed to take action against the effects of the crisis.

“Citizens have clearly identified jobs as their main concern, and the EU must continue to give its full attention and commitment to dealing with the crisis”, said Margot Wallström, Vice-President of the European Commission, responsible for Institutional Relations and Communication Strategy.

A majority of Europeans (54%, -7 points compared to May-June 2009) believe that the worst is still to come regarding the impact of the crisis on jobs, 38% think that it has already reached its peak. This figure is ten points up from the previous survey.

The same more positive trend, compared to Spring 2009, can be observed regarding expectations for the economic situation in the EU in the next twelve months: 30% (+6) of Europeans think that the next twelve months will be better, 38% the same (-) and 21% (-7) worse. 11% (+1) do not know.

Similar more positive expectations were recorded for the future of the world economy: 29% (+5) think it will be better in the next twelve months, 36% (-) the same and 24% (-6) worse. 11% (+1) do not know.

Regarding expectations for the national economy, the positive trend is more moderate. A bigger share of Europeans believe that the overall situation of their national economy will be the same (37%, +1) or worse (31%, -3), rather than better (28%, +3). 4% (-1) do not know.
A majority (51%, +2) consider unemployment as the most important issue in their country at the moment. The economic situation (40%, -2) comes second while inflation, (19%, -2) is the third most important issue together with crime (19%, +3). At the personal level, inflation (38%, unchanged), the economic situation (26%, unchanged) and unemployment (20%, -1) remain the three most important issues.

Both the European Union (22%, +2) and the national governments (19%, +7) are seen as being best able to deal with the crisis. They are followed closely by the G20 (18%, -2) which has lost its second position to the national governments since the spring.

Europeans see the stimulation of research and innovation in European industry (31%), the support of environmentally-friendly production of goods and services (30%), the support to agriculture (27%) and the encouragement of enterprise creation (25%) as the main ways to boost growth in a sustainable way.

Trend indicators on confidence in the European institutions are stable. Overall, 50% (+2) of EU citizens tend to trust the European Parliament while 33% (-3) do not. 46% (+2) tend to trust the European Commission and 32% (-2) do not.

A majority of Europeans (53%, unchanged) continue to perceive their country’s membership to the EU as a good thing, while 57% (+1) believe it has benefited from being a member of the EU.

Since autumn 2007, the appreciation of the way democracy works appears to have been reversed. 53% (-5) are satisfied with the way democracy works in their country while the figure for the European Union is 54% (+2). Two years ago, the way democracy worked at national level (58%) was judged more satisfactory than at EU level (52%).

This ‘Standard Eurobarometer’ survey was conducted through face-to-face interviews by TNS Opinion & Social. A total of 30,238 people were interviewed between 23 October and 18 November 2009. Standard Eurobarometer surveys take place twice a year in Spring and in Autumn.

LITHUANIA’S MINISTER of Foreign Affairs, Vygaudas Ušackas, together with Economy Minister Dainius Kreivys and a business delegation of 28 members arrived in Mumbai, India’s financial centre, recently led by Rajinder Kumar Chaudhary, Honorary Consul of India to Lithuania.

The Ministers attended a business forum at the Confederation of Indian Industry.
Business issues were discussed during the meeting between India’s Minister of External Affairs Somanahalli Mallaiah Krishna and Lithuania’s Minister of Foreign Affairs V.Ušackas on 3 December in Delhi.

During the meeting, Minister Ušackas noted that the visit of almost 30 Lithuanian businessmen, the Minister of Economy and the Foreign Minister to India was the best proof of Lithuania’s interest to develop dynamic economic and political relations with India, the world’s largest democracy that has 1.1 billion people.

Ušackas was glad about the first Indian investment projects in Lithuania and expressed hope that more investors from India would follow the example set by the polyethylene producer Orion Global Pet that is established in the Klaipėda Free Economic Zone.

During the visit, Tadas Karosas, the head of Čili Holdings, signed a franchising agreement with head of the GIPL company Sandeep Grover. In accordance with this agreement, the Čili restaurant chain will expand into India.

India’s pharmaceutical manufacturers took great interest in the distribution of medications on the Lithuanian market and the whole of the European Union market. This was discussed with representatives from the Lithuanian company Eluva.

Lithuanian businessmen also visited a renewable energy factory of solar cells and discussed cooperation possibilities with its administration.

The head of India’s diplomatic division welcomed the interest from Lithuanian businessmen in trade and investment possibilities that India offered. Ministers S.M.Krishna and V.Ušackas agreed to develop a dynamic partnership.

In 2008, Lithuania-India trade amounted to €293 million. Fertilizers constitute a significant part of Lithuania’s exports.

The Indian-Baltic Chamber of Commerce in Delhi is headed by Asta Kuckaitė. Anyone interested in the business possibilities in India, Asta can be contacted at ak@ibcc.lt

On 4 December, Minister Ušackas also met with India’s Minister for New and Renewable Energy Farooq Abdullah and Minister of Commerce and Industry Anand Sharma.A Lithuanian Consulate, headed by Om Prakash Lohia was also opened in Mumbai.

Statistics Lithuania reports that, based on non-final data obtained from customs declarations and Intrastat reporting data, exports in January–October 2009 amounted to LTL33 billion, while imports – LTL37.2 billion.

The foreign trade deficit of Lithuania amounted to LTL4.2 billion, and was by 72.7% lower than in the same period in 2008. Data on trade with EU countries was adjusted after VAT returns’ data had been received.

In January–October 2009, against January–October 2008, exports and imports decreased by 31 and 41.1%, mineral products excluded – by 27.2 and 41.2% respectively. Exports of goods of Lithuanian origin decreased by 31.9%, mineral products excluded – by 26.2%.

An impact on the decline in exports was made by the decrease in exports of petroleum oils and oils obtained from bituminous minerals (by 42.2%), fertilizers (by 52.2%), vehicles other than railway or tramway rolling stock (by 44%), electrical machinery and equipment (by 42.2%). Imports declined due to decreased imports of crude petroleum (by 40.7%), vehicles other than railway or tramway rolling stock (by 70.3%), boilers, machinery and mechanical appliances (by 45.3%).

In October 2009, against September, exports and imports increased by 1.3 and 0.7% respectively, mineral products excluded – by 6.1 and 1.3% respectively. Exports of goods of Lithuanian origin decreased by 1.9%; mineral products excluded, exports of goods of Lithuanian origin increased by 4.6%.

In January–October 2009, the most important partners in exports were Russia (13%), Latvia (10.3%), Germany (9.5%), Poland (7.2%), in imports – Russia (30.6%), Germany (11.1%), Poland (10%) and Latvia (6.3%).

In January–October 2009, the largest share in exports fell within mineral products (21.6%), machinery and mechanical appliances, electrical equipment (9.8%), products of the chemical or allied industries (9.3%), in imports – mineral products (29.7%), machinery and mechanical appliances, electrical equipment (12.6%), products of the chemical or allied industries (12.4%).

Statistics Lithuania informs that, according to the Labour Force Survey data, the number of unemployed in III quarter 2009 was 228,100, just 5000 more than in II quarter 2009, and that the growth in the unemployment had slowed.

In III quarter 2009, the unemployment rate stood at 13.8%, which is 0.2% higher than in II quarter 2009. Over the year (III quarter 2009 against III quarter 2008), the unemployment rate grew 2.3 times.

The most rapid growth has been in the youth (aged 15–24) unemployment rate. In III quarter 2009, 53,000 young people, or one in ten, were unemployed (a year ago it was 26,000).
The youth unemployment rate in III quarter 2009 reached 33.3%. Over the quarter the youth unemployment rate grew by 3.7%. The lowest youth unemployment rate (6.9%) was recorded in II quarter 2007.

Although the number of young unemployed persons a year ago, as compared with III quarter 2009, was twice as low, the number of young unemployed persons with higher education qualifications remained almost unchanged (7400 and 7800 respectively).

The male unemployment rate has been growing faster than the female rate. The male unemployment rate grew from 6% in III quarter 2008 to 17.3% in III quarter 2009, while the female – from 5.9% to 10.3%. In II quarter 2009, the male unemployment rate stood at 16.7%, the female one at 10.4%.

A higher male unemployment rate was conditioned by a rapid decrease in the amount of work in industrial and construction enterprises.

In III quarter 2009, there were 1,424,000 persons aged 15 and over working in the country; as compared with II quarter 2009, this figure remained almost unchanged (growing by 1900, or 0.1%), while over a year it dropped by 113,400, or 7.4%.

Over III quarter 2009, the number of persons working in agriculture, forestry and fishing grew by 7100, trade – by 9000, professional, scientific and technical activities – by 6700. The number of persons working in other economic activities remained almost unchanged.

The most marked decrease over the year was in the number of persons working in construction – from 167,000 to 117,000 (down 30%), accommodation and food service activities – from 43,000 to 36,000 (16%), manufacturing – from 262,000 to 223,000 (15%).

In III quarter 2009, an increase was observed in the number of employees working not under an employment contract (fixed or non-term), but under a verbal agreement. According to the estimates of Statistics Lithuania, in III quarter 2009, the number of such workers was 27,000, which is 11,000 more than in II quarter 2009. The largest share of such workers was recorded in manufacturing and agriculture (8,000 in each), as well as in construction, trade and other sectors.

In III quarter 2009, the employment rate stood at 60.4%; over the quarter, it grew by 0.1%, while a year ago it was higher by 4.6%. In III quarter 2009, the male employment rate stood at 59.6%, the female at 61.2%. Over a year, the male employment rate dropped by 7.9%, the female by 1.5% percentage points.

Unemployment In The Baltic States

According to the data of NSIs of the Baltic States, in III quarter 2009, the lowest unemployment rate was recorded in Lithuania (13.8%), the highest – in Latvia (18.4%); in Estonia, it stood at 14.6%. Over the quarter, the unemployment rate in Lithuania remained almost unchanged, while in Latvia and Estonia it grew by 1.7% and 1.1%.

A return to robust economic growth not expected for at least another two years, immediate reforms a top priority.

In a well-attended seminar held at Reval Hotel recently, over 200 Vilnius business leaders gathered to hear the prognosis of DnB NORD on the research and forecasts for the Baltic rim countries. With presentations from Prof Rimantas Rudzkis, Chief Analyst, and Jekaterina Rojaka, Chief Economist, followed by a frank and open question and answer session, the DnB NORD specialists addressed the most pressing economic issues confronting Lithuania and its neighbours over the coming few years.

Essentially DnB NORD’s Economic Research Group predicts that out of the six Baltic Rim countries, moderate economic growth will be seen in Poland, Finland and, possibly Estonia in 2010, while Denmark, Lithuania and Latvia will need more time to fully climb out of recession.
Forecasts are for unemployment rates reaching possibly 20% by next spring in the three Baltic states. This will translate into low consumer expectations, flat domestic consumption and zero growth of earnings, all of which will contribute to the deflationary processes the region is experiencing. Only Estonia, which has been more successful in reforming its public sector, in comparison to Latvia and Lithuania, can expect a substantial fiscal deficit decrease and adoption of the euro in the near to medium term.

Looking at each country individually:

• Denmark: the expansive budget policy will help mitigate the negative effects of the crisis, however a high level of indebtedness among businesses and households in the country will cause one of the longest recessions in the European Union (EU).

• Finland: the country faces one of the deepest recessions among the old EU members due to the sensitivity of its exports to the global economic crisis. Finland’s recovery will be gradual, and rather sluggish in 2010, impeded by a high unemployment rate.

• Estonia: decisive action in an effort to adopt the euro in 2011 and a clear recession exit strategy will enable the country to take the leading position in the Baltic trio and outrival the other Baltic States in the competition for foreign direct investments.

• Lithuania: political disagreements and floundering reforms in the public sector are undermining hopes of rapid economic recovery. The country will not be able to avoid a protracted depression without a targeted investment, small business stimulus package and restructuring of the public sector. The incumbent government has asserted its commitment to launch the necessary reforms next year, but it still lacks political support to do so.

• Latvia: lack of political will and rapidly rising sovereign debt may result in the erosion of the public sector, loss of competitiveness and the country’s investment appeal. However, immediate structural reforms of public sector and further improvement of the business environment would help the country move forward.

• Poland: the modest level of liabilities amongst both businesses and households, a large domestic market and flexible exchange rate helped the country resist the worst effects of the global economic crisis, and will help insulate Poland from economic problems in the immediate future. They could soon rival Estonia in terms of the average purchasing power. Nevertheless, growing debt of the government sector is a source of concern in the long-term.

You can download the full edition of Baltic Rim Economies:Growth and Constrains 2010 from DnB NORD Bankas’ website: www.dnbnord.lt/publications

According to provisional data provided by Statistics Lithuania, in the first nine-month period of 2009, accommodation establishments had 21.8% less guests than in the same period of 2008.

Over January–September 2009, accommodation establishments (hotels, guesthouses, motels, health resorts, etc.) had 1.16 million guests, of whom 53.6% were foreigners. Hotels and guesthouses accommodated 847,900, other establishments – 75,100, health resorts – 79,900 guests.

Against the same period 2008, the number of guests in Druskininkai decreased by 13.9%, in Birtonas -10.3%,  in Neringa -36.8%, in Palanga - 19.8%.

Over the nine-month period of 2009 against the previous year, hotels and guesthouses accommodated 20.7% less guests; the number of foreigners fell 17.2%. The number of guests from EU countries decreased by 20%. Less guests arrived from the neighbouring countries such as Latvia (26.8%), Estonia (24.4%), Poland (16.2%), Russia (6.2%), as well as from Western Europe – Ireland (42.7%), United Kingdom (38.9%), Norway (31.1%), Italy (26.6%), Finland (24.9%), Denmark (21.6%), Sweden (13.6%), Germany (16.1%).

The number of guests from Belarus increased by 23%, Czech Republic – 11.4%, Iceland – 1.3%. The majority of guests were from Poland – 94,900 (previous year 113,300), Germany – 87,400 (previously 104,300), Russia 52,400 (previously 55,900), Latvia – 43,300 (previously 59,100), Belarus – 21,300 (previously 17,400). The nine-month occupancy rate of hotel and guesthouse rooms was 36.2% (previously 47.9%).

Over the nine-month period of 2009, Vilnius hotels and guesthouses accommodated 390,500 thousand guests, or 20.1% less than in the same period 2008. The number of foreigners was 325,900 or 18%.

The nine-month occupancy rate of Vilnius hotel and guesthouse rooms was 46.5% (previously 58.2%).

Statistics Lithuania, based on the latest available information for September and more comprehensive business and price statistics, has estimated GDP components for III quarter 2009 by production, expenditure and income approaches and revised the first GDP estimate.

According to the revised data, in III quarter 2009, GDP current prices amounted to LTL23,954 million and, against the respective period in 2008, dropped by 14.2%, while against II quarter 2009 it grew by 13.1% (the changes have been estimated using a chain-linked volumes). (The previously published first GDP estimate for III quarter 2009 was LTL23,713 million and, against July–September 2008, dropped by 14.3%, while against the previous period in 2009 it grew by 13%).

Over the nine months of 2009, GDP amounted to LTL68.71 billion, which is by 15.7% less than a year ago.

In III quarter 2009, based on provisional data, negative results were observed for almost all business activities and non-market services. The largest drop in the value added was observed in construction (45%), industry and energy (15.1%), trade, transport and communication (15.7%) and financial intermediation, real estate and other business (12.4%). A slower decrease in the value added was observed in public administration and defence, education, health care and social work activities (1.2%). A growth in the value added was recorded only for agricultural enterprises (4.9%).

Consumption expenditure in July–September 2009, against the respective period in 2008, decreased even more than in the first half of the year. Over III quarter 2009, household final consumption expenditure dropped by 19%, those of non-profit institutions – by 16%. General government final consumption expenditure was decreasing at a slower rate (by 1.5%). A further rapid decrease was observed in expenditure on capital formation: gross fixed capital formation against the previous year declined by 41.4%. Nevertheless, as compared with II quarter 2009, certain minor positive changes have been observed.

A considerable reduction in consumer demand and the volume of production conditioned a decrease in both exports and imports of goods and services in III quarter 2009, against the same period in 2008, (by 17.4 and 31.3% respectively). As compared with the previous quarter of 2009, exports grew by 11.8, imports – by 3.3%

Gross domestic product by county in 2008

Statistics Lithuania informs that, based on provisional data, gross domestic product (GDP) per capita in 2008 grew in all counties.

The most considerable growth in nominal GDP per capita in 2008 was observed in Utena (by 19.2%) and Marijampolė (by 17.1%) counties, while nominal GDP per capita in the country grew by 13.4%.

Just as in the previous year, in terms of GDP per capita as compared with the national average, Vilnius (154.3%) and Klaipėda (100.1%) counties were in the lead. However, nominal GDP per capita in Vilnius county grew by just 11.5, in Klaipėda county – by 10.7%, i.e. these counties demonstrated the slowest growth in nominal GDP per capita as compared to other counties.

In five counties (those of Alytus, Marijampolė, Panevėžys, Šiauliai and Tauragė), GDP per capita is still below 80% of the national average (in 2007, there were six such counties). In Utena county, the indicator in question in 2008 exceeded the 80% threshold (with 82% of the national average).

In 2008, the gap between Vilnius and other regions did not narrow: GDP per capita in Vilnius county exceeded the indicators of Alytus, Marijampolė, Panevėžys, Šiauliai and Tauragė counties two and more times.

According to Statistics Lithuania the number of Lithuanian citizens who emigrated from their homeland in the first 10 months of this year is 18,255. The number for the full year of 2008 was 17,015, so this year’s figure is already over 1000 more than all of last year, and further, according to records kept since Lithuania regained its independence, it is the highest number of people ever to offically leave in the one calendar year.

Including undeclared migration last year, the number of people leaving Lithuania was 23,700, travelling mostly to Ireland, UK, Spain and the USA.

Seimas Approves Cut in Corporation Tax for Small Businesses

Vilnius, Nov 24 (ELTA) - Surprisingly, the Seimas approved the amendments proposed by MP Dainius Budrys to reduce income tax for small companies to 5%. The initial government proposal was to reduce income tax from 13 to 7.5%.

The reduction of income tax to 5% will apply to those companies that employ up to 10 people, and whose fiscal year income does not exceed LTL500,000 (€145,089 euros).

It is further proposed to reduce income tax from 20 to 15% for larger companies

Vilnius among ten least expensive cities

Stockholm, Dec 2 (ELTA) - The experts of the British company PriceRunner which compares the prices of goods and services this autumn have named Oslo, the capital of Norway, the most expensive city worldwide. Lithuania’s capital Vilnius entered the top ten of the least expensive world cities.

The analysts announced their conclusions after comparing prices of the products under 26 different names, including milk, cigarettes, books, computers, BigMac hamburgers, in 33 world cities.

“Prices in the capital of Norway are higher by 35 percent than the average of prices in other countries,” states PriceRunner.

PriceRunner has ranked Oslo the most expensive city in the world for the third year in a row.
The list of the least expensive cities includes Buenos Aires, Vilnius, Prague, Warsaw, San Francisco and New York. Mumbai was ranked as the cheapest city.

Price Runner carried out the study on 17-21 October 2009.

First signs of export growth - President

Vilnius, Nov 24 (ELTA) - On Tuesday President Dalia Grybauskaitė congratulated businessmen at ‘Export Prizes 2009’ and emphasized that the continued efforts of people and businesses, patient work and ability to be flexible had already provided good results, as the first signs of growth of exports were observed. However, the head of state noted that she saw more possibilities of strengthening dialogue between the authorities and business.

“I am glad to see the results of your successful activities in foreign markets. Exports are the basis of growth of our small open economy. By exporting products to foreign markets, you firstly export Lithuanian diligence, knowledge, and values of the nation. You are the business card of our country,” the president noted.

Grybauskaitė also expressed her joy over the fact that there were women among business leaders. Their contribution to sustainable development of business was very important and noted by a number of organizations and experts worldwide.

The president said that exports and its structure was a mirror of the country’s economic policies. The implementation of structural reforms and better business environment as well as the initiatives of business people should give favorable results.

Grybauskaitė noted seeing more possibilities of strengthening the dialogue between authorities that had not been used.

“It would be useful to consolidate your winnings in both domestic and foreign markets,” she said.

European labour markets deeply hit by crisis, but more resilient than expected

The current crisis is taking its toll on EU labour markets, reversing most of the employment growth achieved since 2000, according to the 2009 Employment in Europe Report published on 23 November 2009.

Men, young people, the low-skilled and workers on temporary contracts have borne the brunt of the employment contraction.

Employment in the EU has shrunk by over 4 million jobs since the start of the crisis, although the effect has been somewhat mitigated thanks to the use of shorter working hours and other schemes. But these short term measures, however important, are not in themselves sufficient to ensure a successful exit from the crisis. Employment policies must focus on preparing for the transition to a low-carbon economy.

With this challenge in mind, the 21st annual edition of the Employment in Europe report takes a deeper look at two key issues for future EU labour market policy: movements to, from and between jobs and the implications of climate change for the job market.

EU labour markets are more dynamic than often believed, but long-term unemployment remains a serious threat

European labour markets have shown considerable dynamism in recent years, as every year, around 22% of European workers change jobs.

Such dynamism is not just limited to countries usually seen as ‘flexible’, such as the UK or Denmark, but concerns all EU countries, although the figures range from 14% of workers in Greece and 16% in Sweden to over 25% in the UK, Finland, Spain and Denmark.

This appears to be part of a more sustained rise, since the late 1990s, in transitions from inactivity and unemployment towards employment in the EU, suggesting a fundamental structural improvement in our labour markets.

However, not all workers have benefited equally from this positive trend. Although the number of long-term unemployed has declined since the 1990s, this problem remains a serious challenge. In recent years, close to 45% of all unemployment spells lasted longer than a year in the EU, compared with only about 10% in the US.

Tackling this issue has become even more urgent since the start of the crisis. Policies aimed at supporting workers’ transitions toward employment in line with the principles of flexicurity are key to lowering long-term unemployment and preserving employability.

Lithuanian real estate prices down 35% over year

Vilnius, Nov 25 (ELTA) - Over the past year, the prices of the country’s entire real estate, including land, buildings and their premises, went down almost LTL144 billion (€41.71 billion) or 35%.

These are the first estimates of real estate mass valuation carried out by the Centre of Registers.

The depreciation of the country’s assets was mostly determined by a drop of LTL58 billion (€16.8 billion) or 42% in the prices of land, and a decrease of almost LTL56 billion (€16.22 billion ) or 45% in the prices of units. Real estate in Lithuania presently totals around LTL268 billion (€77.634 billion).

Reval Hotels promotes Juha Mähönen

Reval Hotels, has appointed its Country Manager for Lithuania, Mr Juha Mähönen, in the position of Regional Director, Estonia & St. Petersburg. In this newly created position Mr Mähönen also takes responsibility as General Manager of Reval Hotel Group AS chain’s subsidiary based in Tallinn, Estonia, where they have three hotels, and the newly opened Reval Hotel Sonya in St Petersburg, Russia, will also report to him. Mr Mähönen will start in the new position on 18 January 2010.

The Opportunity of Cutting Edge sectors in the Lithuanian Economy During Times of Crisis

Vincentas Giedraitis is an assistant professor in the Department of Theoretical Economics at Vilnius University

The ideas of 20th century economist and sociologist Joseph Schumpeter can be drawn upon in the case of Lithuanian to emphasize the importance of innovation on one hand, and the danger of stagnation on the other. Innovation can be a means by which to rise in the global economic hierarchy, while stagnation - a means to fall. Schumpeter suggested that innovation and entrepreneurship act as a sort of engine for economies to expand. National institutions such as the government and economy must create favorable conditions for the entrepreneur to be able to bring new commodities to the market. In such countries as Lithuania, still undergoing a post-Soviet transition, opportunities abound for new business ideas.

Schumpeter popularized the term “creative destruction,” by which he meant that innovation by entrepreneurs has the ability to radically change stagnant industries or an entire economy. A current example is the inability of large American automobile industries to rapidly change products under today’s market conditions. The American auto industry is faced with short and long term dilemmas. In the short term, it has taken such measures as reducing costs by asking employees to take extended vacations. But in the long run, will it be able to adapt as quickly as new, smaller, and more innovative companies? The possibility that such massive industries, such as General Motors, which employs some 320,000 workers falling into bankruptcy is a very real concern, while little known start ups such as Tesla Motors offer compelling (and far more efficient) alternatives to buyers.

Lithuania has certain real advantages compared to larger economies in terms of innovation. First, Lithuania’s industries are still in a relatively nascent stage. Twenty years after the collapse of the Soviet Union, its industries are specializing and adapting to a global marketplace faster than the industries of such “old Europe” countries as Germany. This is a case of the so-called “second place advantage”, where a newly opened economy can learn from the mistakes and consequently “out-innovate” them, since they have no new infrastructure to need to replace.

One sector that Lithuania is specializing in quite successfully is biotechnology, where it is a regional leader. According to the Lithuanian Biotechnology Association, the biotech sector in Lithuania has been growing by about 22% yearly for the past five years. Two such companies, Fermentas and Sicor Biotech were sold in 2007 for more than €28 million (Innovations Report 2008).

Another positive development of the biotechnology industry in Lithuania is related to immigration and the “brain drain” phenomenon. Seventeen advanced Lithuanian experts who had previously emigrated have decided to return to the Vilnius Institute of Biotechnology. Dr Daumantas Matulis from the Institute of Biotechnology has stated that: “The growing importance of life sciences and biotechnology in Lithuania is being recognized with ScanBalt Forum 2008 to take place in Vilnius. This is a chance to promote Lithuania as an attractive place to work, live and invest. We intend to further strengthen our position as a strong player within life sciences and biotechnology in the Baltic Sea Region” (Innovations Report 2008).

The aforementioned example of car industries can be related to the economy of Lithuania. Such old Europe economies as Germany are juggernauts, compared to the nimble Lithuania. The country has a very highly educated population and competitive universities that produce bright graduates. Thus, all things equal, per capita, Lithuania needs fewer innovators to make potentially large changes in its much smaller economy, which unlike EU-15 countries, is still in a condition of flux.

Another advantage for Lithuania in terms of innovation is the attractiveness in the previous regard to foreign direct investment. Although Lithuania may lack the capital of “old Europe,” it has a skilled and educated workforce, and low labor costs. This makes it an attractive place for foreign firms that want to also out-innovate the competition. Why build a factory in the traditionally more expensive EU-15, than in the less expensive business climate of such new member countries as Lithuania?

The current economic crisis can in a sense be seen in a positive light for little Lithuania. While the economy is under stress, Lithuanian firms can continue to innovate. However, when the global economy does improve - which with time it will - it will take a far smaller “push” to restore Lithuania’s economy to a strong position, compared to much larger EU-15 countries. The IMF’s Robert Zoellick stated on 22 March 2009 that, weighed down by large, sluggish economies, the global economic recovery is expected in 2010, at which point major economies will break even. However, developing nation economies are expected to expand by up to 4.5% (World Bank 2008).

Regionally, the European Commission states that biotechnology will be a very important part of Europe’s economy in the coming decades. Ernst and Young find that the Lithuanian biotechnology market is one of the largest in the region, with 99% of biotechnology products exported to 86 countries. In 2006, the biotechnology industry had sales in excess of €90 million. Among former Communist countries, Lithuania follows only Hungary in sales volume. The Lithuanian government would be wise to consider investing in up and coming sectors, and thus far seems to be doing so. For example, it has increased biotechnology research funding during the last five years (Innovations Report 2008).

Statistics Lithuania reports that, based on non-final data obtained from customs declarations and Intrastat reporting data, exports in January–September 2009 amounted to LTL29.2 billion, and imports – LTL33 billion. The foreign trade deficit of Lithuania was LTL3.7 billion, 73.5% lower than in the same period last year.

In January–September 2009, the most important trading partners by export were Russia (12.9%), Latvia (10.2%), Germany (9.6%), Poland (7.2%), by import – Russia (31%), Germany (11%), Poland (10%) and Latvia (6.2%).

In January–September 2009, exports fell in mineral products (22%), machinery and mechanical appliances, electrical equipment (9.6%), chemical or allied industries products (9.4%), in imports – mineral products (29.9%), chemical or allied industries products (12.5%), machinery, mechanical appliances, electrical equipment (12.2%).

Statistics Lithuania announced that in October 2009, against September, prices for consumer goods and services went down by 0.4%.

A decisive impact on the overall change in consumer prices was made by a 4.7% price drop for housing, water, electricity, gas and other fuels, 0.5% – food products and non-alcoholic beverages, 1.6% – recreation and culture, as well as by a 4.2% price rise for alcoholic beverages and tobacco products, 1.9% – clothing and footwear.

In October 2009, prices for consumer goods decreased by 0.3%, for services – 0.8%.
In the group of housing, water, electricity, gas and other fuels, the price change was mostly conditioned by a 12.6% price drop for hot water and centralized heat supply, 5.7% – actual rentals for housing.

The price change for alcoholic beverages and tobacco products was conditioned by an 8.7% price rise for tobacco products, 1.7% – spirits, 1.5% – wine and wine products. The price growth for tobacco products was still conditioned by an increased excise duty for cigarettes applied from 1 September.

Other goods and services included: a 1.7% price drop for mobile phone services, 0.6% – fuel and pharmaceuticals each, 5.3% – sanatorium services, 1.4% – cosmetics, 2.1% – accommodation services, as well as a 0.9% price rise for non-durable household goods, 1.4% – services of undefined level education, 0.7% – local passenger road transport services.

In October 2009, annual inflation (against October 2008) was up 1.3%. The inflation rate was mostly influenced by a 19.1% price rise in alcoholic beverages and tobacco products, 15.6% – health care goods and services, 9% – miscellaneous goods and services, as well as by a 3.3% price drop for food products and non-alcoholic beverages, 9.9% – clothing and footwear.

Prices for consumer goods showed an annual increase of 0.3%, services – 4.3%.

Based on provisional data provided by Statistics Lithuania, in Q3 2009, construction carried out on domestic work amounted to LTL1663 million at current prices, which is by 48% less than in II quarter 2008. The value of construction work carried out within Lithuania was LTL1621 million (97%), and outside Lithuania LTL42 million (3%).

The bulk of construction (55%) was civil engineering works, while building construction made up 45%. New construction accounted for LTL618 million, which was 38% of the total value of domestic construction.

In Q3 2009, 1143 non-residential buildings were recognised as suitable for use, with the total floor area of 449,000. m2, which is 6% more than in Q3 2008. In terms of the total floor area, trade, catering enterprises and hotels (169,000. m2), industrial buildings and warehouses (116,000 m2) made up most of the construction.

In Q3 2009, 566 building permits for the construction of 956 non-residential buildings with the total area of 343,000 m2 were issued, which is by 17% less than in Q3 2008. In terms of the total floor area, the highest number of permits was for construction of trade, catering enterprises and hotels (48%).

In January–September 2009, against the same period in 2008, the number of building permits for the construction of non-residential buildings decreased (by 89); the total floor area of non-residential buildings whose construction had been authorised by building permits decreased by 423,000 m2.

Based on provisional data, in Q3 2009, investment in long-term tangible assets totalled LTL3224 million, which is 35% less than in Q3 2008.

The bulk of investment (72%) fell within construction; 27% of total investment was allocated for the acquisition of long-term tangible assets. As compared with Q3 2008, investment in building construction and civil engineering decreased by 23%. Against Q3 2008, investment in the purchase of buildings and civil engineering structures decreased by 73%.

In Q3 2009, LTL573 million was allocated for the construction and purchase
of residential buildings (12% less than in Q3 2008).

Highest rise in part-time workers in Estonia, Ireland and Lithuania

The percentage of part-time workers rose in the EU27 from 18.3% in the second quarter of 2008 to 18.8% in the second quarter of 2009, and from 19.6% to 20.0% in the euro area. Over the preceding year the share of part-time workers had remained stable in the EU27, while it had increased by 0.1% in the euro area.

Between the second quarters of 2008 and 2009, the share of part-time workers rose in 22 of the 27 Member States. The highest increases were in Estonia (+5.3 to 11.7%), Ireland (+2.3 to 20.8%), Lithuania (+2.1 to 8.6%) and Slovakia (+1.8 to 4.0%), reports Eurostat.

GDP increased by 0.4% in the euro area (EA16) and by 0.2% in the EU27 during the third quarter of 2009, compared with the previous quarter, according to flash estimates published by Eurostat. In the second quarter of 2009, growth rates were -0.2% in the euro area and -0.3% in the EU27.

Compared with the same quarter of the previous year, seasonally adjusted GDP decreased by 4.1% in the euro area and by 4.3% in the EU27 in the third quarter of 2009, after -4.8% and -4.9% respectively in the previous quarter.

The biggest improvement was in Lithuania, which boasted the highest growth of 6%, though coming on the back of the steepest decline of 11.3% for the first quarter 2009, and 7.7% in the second quarter 2009.

Vilnius, July 21 (ELTA) - On Tuesday the Seimas approved the amendments to the value added tax raising the VAT tariff from 19% to 21%. Sixty-five MPs voted for, 40 parliamentarians against and 22 MPs abstained.
However, the Seimas left the preferential VAT tariff for heating proposed by the Government, despite several MPs had registered an amendment proposing to apply preferential tariff of 5% for heating. A preferential VAT tariff is also proposed for books and non-periodic information publications.

Mayor Vilius Navickas, who brought the idea of Disneyland theme park to Vilnius from his official visit to Chicago in the U.S.A. has received negative responses from both Disneyland company and Legoland. Walt Disney Parks and Lego Group investors were proposed to consider the possibility to erect high-class entertainment park in Vilnius with their own finances.
It became clear from the responses that the companies are not currently planning to make investments in the Baltic region.
“By sending letters to these companies we just checked whether such a possibility existed. We expected such a variant too, however, our provision that a theme park that would be attractive to both Lithuanians and guests from abroad should be erected does not change,” mayor’s advisor Darius Indriunas told the daily Vilniaus Diena.

Vilnius, June 30 (ELTA) - All necessary permits for ights have been granted to Star1 Airlines. As of this Friday, the Lithuanian capital-based company will restore the air bridges between Vilnius and London, Dublin and Girona (Barcelona).
The Civil Aviation Administration (CAA) restored the company’s carrier certicate of the air company Star1 Airlines, and the Transport Ministry granted the company new commercial ights license.
According to Star1 Airlines CEO Martynas Laivys, the rst regular ight to London will take place this Friday. Meanwhile, charter ights are being performed from today morning. The air company will perform ights to Turkey in line with the order of the travel organizer Star Holidays.
“Very soon Vilnius will restore air bridges with the most important European cities. Therefore, I personally believe that the beginning of our activities will be useful to the entire Lithuania,” says Laivys.
Star1 Airlines will expand regular ights geography to other European destinations after adding the second aircraft to its eet. Paris, Milan and additional ight frequencies to London are now being planned.
“We will continue putting all effort into strivings to renew Vilnius, and entire Lithuania’s, connection to the European countries and intend to present new ight directions with a new plane in the end of the summer,” Laivys says.
According to him, the ticket prices of the ights to Europe organized by the company will continue being highly competitive compared to other companies.
The company will use Boeing 737- 700 Next Generation, ying 148 passengers. The air company plans to rent yet another plane of the same type in the second half of this summer. In addition to regular ights, it will perform charter ights.
Star1 Airlines belongs to Star Team Group, which also owns new tour operator Star Holidays.

Vilnius, July 16 (ELTA) - The Government is not satisfied with the incumbent banks’ activities and the fact that the loan bag has been closed, however, it does not have any influence instruments to change this situation. Acting Prime Minister Andrius Kubilius stated this at the Thursday Government hour at the Seimas.
“The only thing which we can do is to strengthen trust in the Government’s activities on the international markets. If borrowing becomes cheaper on international markets, it will become cheaper in the country too,” Kubilius said.
According to the acting prime minister, the Government is actively speaking with banks and trying to make pressure for borrowing to become cheaper, however, it cannot make any real influence.
“We are talking, expressing our remarks. We do not hold big instruments, however, we see the situation and attract the attention of the governments of those countries where the banks are operating to it. I believe that by autumn we will have the result of these discussions and new proposals,” the acting prime minister explained.
According to him, first of all the authority itself should seek solutions and not press banks. “That is why we are coming to you with reduced budget for the third time, because nobody will propose another variant,” Kubilius told MPs.

Vilnius, Aug 6 (ELTA) - The first gross domestic product estimate of the second quarter, announced by the Department of Statistics, revealed a very abrupt 22.4% drop in GDP. According to this data, the economic contraction did not slacken in the second quarter. However, this allows preempts substantially softer quarterly changes in the second half of 2009.
The presumption that the real economic activity is higher due to the growth of the shadow economy also should not be rejected; however, it is currently difficult to quantify this. Moreover, in the autumn of 2009, the Department of Statistics will review data of recent years, which may cause substantial changes in the GDP growth. The data dynamics permits to expect a smaller adjusted GDP for 2008, meaning also a lower than currently announced GDP drop and more optimistic projections.
The economic downturn in Lithuania, associated with intense changes in external and domestic demand, strengthened the uncertainty of economic development prospects substantially.
Lower precision of the projections can be attributed to a continuous downgrading of economic forecasts of the main foreign trade partners in recent quarters, as well as to the latest statistical data. For example, recently the changes in stocks have grown eminently: in the first quarter of 2009 the changes in stocks amounted to 12.7 per cent of the nominal GDP (in comparison, in 2005-2008 - approximately 3 percent on average). As this GDP component partly covers the statistical mismatch between GDP evaluated by production and expenditure approaches, its increase entails a much higher uncertainty when projecting GDP and other macroeconomic indicators.
Compared to the projections of May, changes in the real sector are expected to be more sizeable. However, taking into account the intense GDP drop in the first half of 2009, a considerable deceleration of the downturn is expected for the second half of the year, with GDP this year shrinking by 19.3%. The stabilisation scenario is supported by boosted sentiment in global markets. A recent rise in the stock and commodity markets, better than expected US GDP indicators for the second quarter, positive news in manufacturing and real estate market show stronger signs of a start to global recovery. Higher external demand would activate the Lithuanian tradable sector and be a significant factor of an overall economic recovery.
The projected economic downturn in 2009, bringing Lithuania’s real GDP back to the 2004-2005 levels is historically comparable. For example, Scandinavian countries in 1993 lost the real GDP gain of 5-6 years because of the credit crisis, in 1998 the economy of Indonesia returned to the level last seen 4-5 earlier, the same year Russia’s GDP was the lowest from the start of the statistical data calculation (1987).
The projected further 5.2% fall of Lithuania’s GDP in the next year is associated with worse domestic demand trends due to still declining wages and an increased unemployment rate.
Compared to May, assessments of price developments remain broadly unchanged - in 2009-2010 inflation will account for 3.9 and -2.0 per cent, respectively. The impact of VAT rate increase from September should be compensated by cheapening of electricity and natural gas, reduction of the excise duty on diesel fuel, and heating energy price changes due to cheaper natural gas. Higher prices of electricity from 2010 will push inflation up; however, this effect should be outweighed by the general deflationary trends related to a strong economic downturn and decreasing wages.
An alternative scenario envisaging a slower economic activity stabilisation compared to that in the baseline scenario should not be rejected. Key risk factors that may entail worse projections are persisting uncertainty in terms of a further economic development of foreign countries, a more profound decrease in private consumption and investments, and a higher unemployment rate. According to this scenario, GDP might shrink up to 2 percentage points more.
A steeper private consumption drop may be induced by unfavourable labour market trends and a curtailing loan flow. A more intensive unemployment growth and more robust wage decline should drive stronger changes in disposable income of the population. A negative impact on household expenditures is also caused by changed trends in the flow of loans for house purchase and consumer loans. Tighter lending conditions, expectations related with a further fall of real estate prices, and a substantially more circumspect assessment of future income contributed to a shrinking portfolio of household loans - in the first quarter of this year, households repaid more loans than took new ones. In the case of a slower economic activity stabilisation scenario, pessimistic expectations may weaken the demand for loans and stimulate households to limit expenditures more than currently forecasted.
If the assumption of a robust external demand recovery does not fulfill, a stronger downturn than that envisaged in the baseline scenario is possible. At the beginning of the year, given strong uncertainty of economic development prospects, investments into the means of production experienced a particularly intensive drop. A protracted recovery in global markets would contribute to a further decrease of these investments. Investments are also limited by unfavorable borrowing conditions, while a fallen share of profitable enterprises demonstrates fewer opportunities for enterprises to finance investments by their own funds. A less favorable development of the global economy would in turn entail a subsequent recovery in international financial markets and would allow planning of a stronger than currently projected curtailment in the flow of the loans to enterprises in Lithuania.
A deeper contraction in domestic and external demand would also change the assessment of the foreign trade development. Imports and exports this year would drop more than envisaged in the baseline scenario. Next year changes of these indicators will be softer - the growth of exports would be encouraged by a subsequent start of the recovery of Lithuania’s trade partners, while the downturn of imports would be eased by an increasing imports of natural gas or electricity after the closure of the Ignalina Nuclear Power Plant.

Vilnius, June 29 (ELTA) - In June, consumer sentiment improved compared to May and stood at minus 42, an increase of 6 points.
According to the Lithuanian Department of Statistics, in June, compared to the previous month, expectations in all areas somewhat improved.
In June, 4% of respondents said that their financial situation improved over the past 12 months, 60% said that it got worse, and 36% thought that it remained unchanged. In May, these figures were 4, 58, and 37%.
The surveys show that in June 9% of respondents expected their household financial situation to improve, and 42% forecasted that the situation would get worse (9% and 48% in May). 43% of Lithuanians surveyed said they did not expect their financial situation to undergo any changes soon.
When evaluating the economic situation in the country, 1percent of respondents said that it improved over the past year, but 91% indicated that the situation deteriorated, and 8% said that the national economy had been stable over the past twelve months. In May, these figures were 1, 90, and 9%.
In June, 14% of residents expected the general economic situation in the country to improve, although 55% indicated that things would get worse. 27% of the respondents were confident that the general economic situation in the country would remain stable. In the previous month, these figures were 10, 65, and 21%.
In June, 88% of residents projected an increase in the number of unemployed over the following 12 months. This figure stood at 91% in May.
Consumer sentiment in urban and rural differed a bit in June: in urban area it stood at minus 40 and in rural area - at minus 44. Compared to May, it increased 7%age points in urban area and 4%age points in rural area.
Over the year, compared to June 2008, the consumer sentiment index slumped 21%age points.
German companies to look for business partners in Lithuania
Vilnius, June 29 (ELTA) - In the light of a visit of a delegation of German business companies to the Baltic states, on Monday a conference is to be held in Vilnius on the initiative of the German bank Sparkasse Freiburg-Nordlicher Breisgau and the Lithuanian Economic Development Agency (LEPA) in order to acquaint Germans with business conditions in Lithuania.
According to LEPA representative to Germany Lina Gudelionyte-Gyliene, although German economy is currently suffering from hard times too, the size of the German market and the variety of products and services provided by companies enables hope that Lithuanian market is attractive and prospective for Germans. “We hope that Germans’ visit to Lithuania will be fruitful for both countries,” she said.