Economy adversely affected by geopolitical events

A2

MEDIUM RISK for enterprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

Last updated in December 2022.

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GDP USD39bn (World ranking 96, World Bank 2021)
Population 1.90mn (World ranking 149, World Bank 2021)
Form of state Parliamentary republic
Head of government Krisjanis KARINS  (Prime Minister)
Next elections 2026, legislative
  • Low systemic political risk
  • Good international relations, except with Russia
  • Competitive business environment
  • Eurozone membership provides for low transfer and convertibility risk
  • Adequate public finances and access to international capital markets
  • Small industrial base
  • Low R&D spending (0.6% of GDP in 2018) relative to OECD average (2.4% of GDP in 2018)
  • Unfavorable export structure, largely dependent on Russia (prior to the war in Ukraine) and other Baltic States
  • Banking sector remains vulnerable due to the high level of (volatile) non-resident deposits
  • Regional inequalities and mismatch in labor markets (between workers and jobs)

Trade structure by destination/origin

(% of total, 2021)

Exports Rank Imports
Lithuania 17.8%
1
17.2% Lithuania
Estonia 10.6%
2
10.2% Germany
United Kingdom 7.7%
3
9.6% Poland
Germany 7.3%
4
9.1% Russian Federation
Russian Federation 7.3%
5
8.9% Estonia

Trade structure by product

(% of total, 2021)

Exports Rank Imports
Cork and wood 12.3%
1
6.2% Road vehicles
Cork and wood manufactures (excluding furniture) 6.5%
2
5.4% Eletrical machinery, apparatus and appliances, n.e.s
Telecommunication and sound recording apparatus 6.2%
3
5.0% Iron steel
Cereals and cereal preparations 4.6%
4
4.9% Telecommunication and sound recording apparatus
Road vehicles 4.2%
5
4.4% Petroleum, petroleum products and related materials
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