Economy of Lithuania

Lithuania hosts 13 of the 20 largest IT companies in the Baltic States. Lithuania exported EUR 128 million worth ICT services in II quarter of 2018. Around 37,000 employees work for more than 2,000 ICT companies. ICT received 9.5% of total FDI. Development of shared services and business process outsourcing are some of the most promising fields.

The financial sector concentrates mostly on the domestic market. There are thirteen commercial banks that hold a license from the Bank of Lithuania and eight foreign bank branches. Most of the banks belong to international corporations, mainly Scandinavian. The financial sector has demonstrated incredible growth in the pre-crisis period. Bank assets were only €3.2 billion or 25.5% from GDP in 2000, half of which consisted of loan portfolio.

The country has increasingly sought to position itself as the EU's main fintech hub, hoping to attract international firms by promising to provide European operational licences within three months, compared to a waiting period of up to a year in countries like Germany or the UK. In 2017 only, 35 FinTech companies came to Lithuania - a result of Lithuanian government and Bank of Lithuania simplified procedures for obtaining licences for the activities of e-money and payment institutions. Europe's first international Blockchain Centre launched in Vilnius in 2018. The government of Lithuania also aims to attract financial institutions looking for a new location after Brexit. Lithuania has granted a total of 39 e-money licenses, second in the EU only to the U.K. with 128 licenses. In 2018, Google set up a payment company in Lithuania, Vilnius was ranked a seventh FinTech city by foreign direct investment performance in 2019.<br>Bank of Lithuania, the Central Bank of Lithuania established a Regulatory sandbox to test financial innovations in a live environment under the guidance and supervision of the Bank of Lithuania. Bank of Lithuania has also developed LBChain which is the world's first blockchain-based sandbox developed by a financial market regulator, combining technological and regulatory infrastructures.

Furniture production employs more than 50,000 people and has seen double-digit growth over the last three years. The biggest companies in this field work in cooperation with IKEA, which owns one of the biggest wood processing companies in Lithuania. Lithuania is the fourth biggest supplier of furniture for IKEA after Poland, Italy and Germany.

Continental AG in 2018 started to build a factory for high precision car electronics - the biggest greenfield investment project in Lithuania so far. Another German manufacturer of lighting technology Hella opened a plant in 2018 in Kaunas FEZ, which will produce sensors, actuators and control modules for the automotive industry. Lithuania's automotive cluster experienced significant growth during the past 5 years.<br>Companies in the automotive and engineering sector are relatively small but offer flexible services for small and non-standard orders at competitive prices. The sector employs about 3% of the working population and receives 5.6% of FDI. Vilnius Gediminas Technical University prepares experts for the sector.

Tourism in Lithuania becoming increasingly important for local economy, constituting around 5.3% of GDP in 2016 Lithuania has 22,000 rivers and rivulets, 3,000 lakes, a well-developed rural tourism network, a unique coastal area of almost 100 km and four UNESCO World Heritage Sites. Lithuania receives more than 1.4 million foreign tourists a year. Germany, Poland, Russia, Latvia, and Belarus supply the most tourists, and a significant number arrive from the UK, Finland, and Italy as well.

Despite a decreased share in GDP, the agricultural sector is still important for Lithuania as it employs almost 8% of the work force and supplies materials for the food processing sector. 44.8% of the land is arable. Total crop area was 1.8 million hectares in 2008. Cereals, wheat, and triticale are the most popular production of farms. The number of livestock and poultry has decreased twofold compared to the 1990s. Lithuanian food consumption has evolved; between 1992 and 2008, consumption of vegetables increased by 30% to 86 kg per capita, and consumption of meat and its products increased by 23% during the same period to 81 kg per capita. On the other hand, consumption of milk and dairy products has decreased to 268 kg per capita by 21%, and the consumption of bread and grain products decreased to 114 kg per capita by 19% as well.