Expectations on Lithuanian economy prospects diverge in annual industrialists' economic forum

Xinhua

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Lithuanian government heads and leaders of business society have expressed different views on Lithuanian economy prospects with the latter being more pessimistic in an annual economic forum held by Lithuanian Confederation of Industrialists on Monday.

In his speech to business community, Algirdas Butkevcius, Prime Minister of Lithuania, emphasized that due to geopolitical tensions these years were full of challenges to Lithuanian economy.

"However, taking into account the results of three quarters we can rejoice that we didn't stumble in the face of threats," said the head of the Government.

"Even though, the business has strengthened, and the economy maintained its growth," he added.

In the third quarter, Lithuania's GDP grew 2.7 percent over the same period last year, according to revised data from Statistics Lithuania. The result was a bit stronger than the 2.6 percent increase reported in the flash estimate, but down from the 3.4 percent expansion recorded in the second quarter and marked the slowest growth since second quarter 2012.

According to the Prime Minister, the number of employed people has increased by 3.1 percent during the year, or at the fastest pace in a decade. Butkevicius argued that positive changes in Lithuania has encouraged Lithuanians working abroad to return.

"In the period of January to October, 9.2 percent more Lithuanians have returned compared to the same period last year," Butkevicius said in his speech.

The heads of the industrialists during the forum expressed opposite views on prospects of Lithuanian economy.

Robertas Dargis, the President of Lithuanian Confederation of Industrialists, described these years as time of failed recovery of EU market, Russia's food embargo and problems of Lithuanian carriers. He opposed the Prime Minister on demography and labor market issues.

"The public sector is an employer to around 400,000 people, so there's a lot to change here. The number of pensioners is increasing and it will increase, while the number of children as well as employees is decreasing and it will decrease," said Dargis in his speech.

The President of the Confederation added that Russia currently is the biggest threat to the global economy, and the expectations of global business are the worst in five years. He paid attention to efforts of Lithuanian companies trying to diversify export markets in response to Russia's food embargo.

"Next year will be the year of transformation and markets' diversification. One will need to pay a great attention to this," said Dargis.

According to Dargis, Lithuanian industrialists are looking for opportunities in China, Southeastern Asia.

Gitanas Nauseda, the advisor to the SEB Bank president in Lithuania, said that Lithuanian businesses must forget expectations on fast recovery of euro zone.

"The sight is shifting towards Southeastern Asia. Attempts to enter Malaysia, Indonesia and other countries of that region are very welcome. Maybe Russia has made us a favor," Nauseda was quoted as saying in the forum by local media.

Rimantas Rudzkis, professor from Vilnius University, argued that the steep increase of Lithuanian exports to Russia despite Russia's food embargo is temporary.

"Our exports to Russia have increased by 26 percent. Russian companies are feverishly rushing to buy equipment. Everyone's afraid of what's going to happen in the future," said Rudzkis in his speech.

"This process is temporary and it will end soon," he emphasized.

According to Statistics Lithuania, in September Lithuanian exports to Russia accounted to 1.56 billion litas (about 557 million U.S. dollars) and increase by 26.2 percent compared to the same month last year. Meanwhile, the exports of Lithuanian origin goods have decreased to 157.4 million litas, or 27 percent compared to the same period last year. Last year exports to Russia accounted to about one fifth of the total Lithuanian exports. (1 U. S. dollar = 2.8 litas)