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LITHUANIA
Economy

Cities in LITHUANIA

Vilnius

Economy

Lithuania, together with the other Baltic republics, belongs to the Baltic economic area. Traditionally, agriculture and forestry have been the main means of livelihood, but after the Second World War, industry rose sharply and, as a result, there was a strong migration from the countryside to the cities (in 1937, 23% of the population lived in the cities; in 2013, 67%).

Immediately after independence in 1991, Lithuania quickly gained a reputation as the economically weakest of the three Baltic states. For example, in 1996 inflation was 35%, unemployment was 8.3% and GDP per month in 1996 was $155. The banking crisis in 1995 did not help either. In recent years, however, the economy has been doing better. For example, in 1997 foreign investment in Lithuania was six times higher than in Latvia and Estonia combined. Inflation fell to 3.7% in 2017. Economic growth in the same year was 3.9%, GDP per capita was $32,400 (2017).

Almost half of the country's total area is used as arable land (49.1%); crops include cereals, flax, potatoes, sugar beets and vegetables. The agricultural sector accounted for 3.5% of GDP in 2017.

In the early 1990s, the agricultural sector was thoroughly reorganised. Private land was allowed again and the large state farms were divided into small ones, averaging 8.8 ha, which were often economically unprofitable.

Of the surface area, 16.3% is covered with forest, mostly coniferous; the wood yield is about 2.5 million m3 per year.

As mineral resources, Lithuania possesses various rocks (gypsum, lime, dolomite) that are suitable for making cement, glass and high-quality ceramics. Furthermore, peat, iron ore, phosphorite and mineral water are extracted.

Exports brought in $29.1 billion in 2017. The main export products are machinery, minerals, textiles and clothing, chemicals and plastics. The main export partners are Russia, Germany, Latvia, Poland and the United States.

In 2017, $31.6 billion worth of goods were imported. The main import products are gas, oil, coal, machinery and chemicals. The main import partners are Russia, Germany, Latvia and the Netherlands.

The important industrial sectors are the chemical industry, machine industry, metal industry, electronics, forestry products, building materials, food industry and textile industry. The machinery industry, which among other things produces ships, turbines and workbenches, is mainly concentrated in and around the large cities. The port city of Klaipeda, for example, has several shipyards where fishing boats are built and repaired.

Of the chemical industry, fertiliser production is particularly important. The light and food industries are located in the big cities as well as in many smaller ones; the production includes textiles (linen, wool), wood, paper, leather goods, canned goods and sugar.

Railways are the main means of transport; the railway network covers more than 2,000 km. The narrow-gauge railways that Lithuania had for a long time have almost all been closed down, although they are often still visible on maps. Car traffic has good paved and unpaved roads. Lithuania has about 600 km of inland waterways that are navigable all year round. The main international airport is Vilnius. The main seaport is Klaipeda; Kaunas has the largest inland port.


Sources

Estonia, Latvia, and Lithuania : country studies
Federal Research Division, Library of Congress

McLachlan, G. / Lithuania
Bradt Publications

Williams, N. / Estonia, Latvia & Lithuania
Lonely Planet,

CIA - World Factbook

BBC - Country Profiles

Last updated May 2024
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