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Country Report Lithuania Product Image

Country Report Lithuania

  • Published: August 2014
  • Region: Lithuania
  • 25 Pages
  • The Economist Intelligence Unit

The Baltic states (Estonia, Lithuania, Latvia), Finland and Poland have the most to lose from Russia's ban on EU food imports. This was a retaliation to the imposition of harsher economic sanctions from the EU and US at the end of July 2014, in response to Russia's intervention in Ukraine. The ban will have a direct short-term impact on the agricultural sectors in these economies, although some are in a better position than others to withstand this. Longer-term effects include a potential breakdown in political relations over the next five years, and lost opportunities from foreign investment. A move by Russia to cut gas supplies does not form part of our core scenario, but some of these countries are highly vulnerable to such an event.

Russia is Lithuania's leading external market, accounting for around one-fifth of total exports in 2013, the highest of any EU member. It accounts for 12% of export sales from Latvia, 12% from Estonia, 10% from Finland and 5% from Poland. These shares diminished in the first half of 2014, as growth in Russia slowed and the depreciating rouble made EU imports more expensive. We expect the EU-US sanctions to exacerbate the slowdown in Russian economic READ MORE >

Country Report Lithuania

Russia's import ban hurts the Baltics, Finland and Poland
Short-term impact:
Banned products comprise key exports from the region
Compensation from Brussels
Limits to exposure in the Baltic states
Long-term impact:
Lost investment opportunities in Finland
Poland's banking sector
Reaction from the Baltic Russian population
Energy threat

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