Strong Lithuanian exports despite global weaknesses. What‘s the recipe?
- Weak global trade and escalating trade tensions did not significantly affect Lithuanian exports, which grew by 7.3% during the first 10 months of 2019.
- Manufacturing, in general, and furniture, in particular, experiencing strong and consistent growth, may explain the source of resilience.
- However, highly concentrated low-value-added sectors could shortly turn into the greatest weakness if the business cycle turns.
Against most expectations, the Lithuanian economy has bucked the trend in 2019 – GDP growth maintained nearly 4% growth in the first 9 months, mainly based on strong exports and domestic demand. Despite the weakness in Germany, which is the biggest export market, export there increased by 8.4% during the first 10 months this year, compared with the same period a year ago. Exports to other important markets, such as Poland and Estonia, also grew by 3.5% and 4.8%, respectively.
The significant increase in exports, as well as manufacturing, which grew by 4% during the first 10 months of 2019, raises the question of where this strength is coming from. Analysis shows that part of the increase in exports, as well as manufacturing, can be explained by greenfield investments, especially in the furniture, machinery, and electric equipment industries.
Ilekytė, +370 5258 22 75, email@example.com.
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