“The global business community could take Lithuanian exporters as an example of how to manage risks, make quick decisions and adapt in a constantly changing and uncertain international economic environment. We continue to provide support to Lithuanian business, we are working hard to open up new opportunities and new markets for Lithuanian products, and we are particularly focused on strengthening Lithuania’s image as a high value-added business partner,” says Aušrinė Armonaitė, Minister of Economy and Innovation.
The value of exports grew by 30.6% in the first quarter and by 24.5% in the second quarter of this year. The overall growth in exports has been mainly driven by goods of Lithuanian origin, with their exports increasing by as much as 31.1% in the first half of 2022, compared to the same period of the previous year.
The oil industry accounted for almost a third of the total value growth (10.1 percentage points out of 31.1%). Successful growth continued in the exports of engineering products (23.4%, or 4.8 percentage points out of 31.1%), pharmaceuticals and chemical products (23.5%, or 4 percentage points), food products (30.1%, or 3.5 percentage points), wood and furniture products (40% and 22.1% respectively, or 2.4 percentage points each).
“The outlook for export developments in the second quarter looked cloudy to the tensions caused by Russia’s war in Ukraine; however, only a slight decrease in the annual growth rate has been observed on a quarter-on-quarter basis. Moreover, the tendencies and expectations in Lithuanian manufacturing business remained optimistic in July. This suggests that exports of Lithuanian origin will continue to grow in the next quarter, provided that conditions in global markets do not deteriorate substantially,” says Jonė Kalendienė, Head of Research and Analysis at Innovation Agency Lithuania.
According to her, the price increase is likely to have accounted for about half of the total export growth rate, and the impact of changes in the prices of exported goods has been increasing. In the first quarter of 2022, export prices increased by 8% on average, while in the second quarter they increased almost twice as fast, i.e. by more than 14%. “Even as prices rise, Lithuania’s export volumes are also growing rapidly. However, we can observe a slowdown tendency in export volumes. It is likely to intensify in the second half of 2022,” says Ms Kalendienė.
Germany (9.9%), Poland (9.2%), the USA (7.9%), Latvia (7.6%) and Sweden (6.3%) remain the main markets. Together, these markets accounted for 40.8% of the value of exports of Lithuanian origin. As a result of the war, exports of goods of Lithuanian origin to Ukraine fell by as much as 48.1% in the first half of 2022, putting Ukraine to the 17th position (8th in 2021) in the list of top export markets.
“It should be noted that the growth rate of exports to Germany has slowed down slightly – from annual 30.7% in the first quarter of 2022 to 24.2% in the second quarter. Possible economic difficulties in Germany due to energy prices and shortages are one of the biggest risks to export growth in the second half of the year,” notes Ms Kalendienė.
In the first half of 2022, re-exports grew by 21.4%. According to analysts at Innovation Agency Lithuania, the sustained pace of growth in re-exports was one of the main reasons why total exports continued to grow rapidly following the imposition of economic sanctions on Russia and Belarus, the main re-export markets.
The structure of re-exports, both by product and by market, evolved in the first quarter of this year. Exports of consumer and investment goods to Russia and Belarus are being replaced by exports of natural gas products to neighbouring countries. Natural gas accounted for almost half of the growth in the value of re-exports (9.2 percentage points out of 21.4%). In the first half of 2022, the value of re-exports to Russia and Belarus decreased by 19.5% and 2.2% respectively. However, Russia (16.7%) remained one of the most important among the five markets for re-exports, along with Latvia (20.9%), Poland (9.1%), Estonia (7.7%) and Germany (5.8%).
