Lithuania Industry

Oil refining has traditionally been the basis of Lithuanian industry. Although declining in importance in recent decades, refining still accounts for around one-third of industrial production. The food industry is the second largest sector.

Lithuania’s only oil refinery is called Orlen Lietuva (formerly Mažeikių Nafta) (see also Natural Resources and Energy). Forests are the country’s most important natural resource and the timber industry is important, as is the pulp and paper industry, furniture manufacturing and other joinery production.

The vast majority of industries are small businesses. Lithuania specializes in light manufacturing, requiring relatively well-trained labor, such as the production of textiles, furniture, refrigerators, electronics, food and pharmaceuticals. There is also significant production of machinery, transport equipment and chemicals.

The industry suffered a deep decline in the first years after the country’s independence from the Soviet Union in 1991, when production fell sharply during the transition to a market economy (see Economic overview). Although Lithuania’s industry was at the forefront of the Soviet system, large parts without competitiveness were international. The heavy industry had to a large extent been militarily oriented.

  • COUNTRYAAH: List of top trading partners of Lithuania. Includes countries that imported most shipments from and exported most goods to the country.

The trend turned upwards in the mid-1990s, when the textile, clothing, shoe and wood products industries were modernized and gained new markets in the EU. Most of Lithuania’s furniture production has long been sold to Ikea.

Through the privatizations, the Lithuanian industry attracted many foreign investments. In particular, investors were attracted by the low wage situation, which partly hampered innovations and the development of a knowledge-intensive industry. In recent years, some labor-intensive production has been moved to Asian low-wage countries and to neighboring countries such as Russia, Belarus and Ukraine. In the mid-2010s, around a quarter of the workforce was in the industry.

The construction sector expanded sharply after the turn of the millennium and contributed to rapid economic growth, especially in Vilnius. Several large-scale construction projects were carried out. However, the construction and consumption boom led to economic overheating with a deep crisis as a result of 2008-2009. Both the construction industry and the export industry were hit hard. After 2010, a new recovery has taken place. Between 2011 and 2015, the number of newly built residential buildings increased by more than 50 percent.




Seimas votes yes to electoral reform

December 12

Parliament approves a new electoral law which lowers the barrier to take up the seats added in proportional elections to three percent for parties and five percent for partial alliances; It is primarily the ruling party LVŽS, as well as the Social Democratic LSDDP and the Election Action for Poles in Lithuania, which is behind the initiative, which they believe will further strengthen the democratic system. Critical evaluators believe that the new electoral law is an attempt by the parties to favor their own position, as several of them have recently lost voter support, while some of them run the risk of falling below the current five percent barrier for parties and seven for election alliances.


More parties in the government

23 July

Prime Minister Saulius Skvernelis reforms the government. Two new parties are included, so that the coalition now includes four parties. In addition to the Farmers ‘and the Greens’ Alliance and the Social Democrats, the right-wing party also includes Order and Justice and the Election Campaign for Poles in Lithuania. In total, the four-party coalition has 75 of Parliament’s 141 seats.

Nausėda takes over as president

July 12

Gitanas Nausėda takes over as Lithuania’s new president. The right-wing politician and economist Nausėda, who stood as independent in the presidential election, promises to take on the major social and economic gaps in Lithuania. As it is now, he points out, the richest fifth of the population earns seven times more than the poorest. However, it is not the President who has the main responsibility for economic policy in Lithuania. Nausėda emphasizes that he wants the government to invest more in social welfare, health care, education and culture, deepen cooperation with the EU and the US and invest in defense.


The Confederation of Finland is the largest in the EU elections

May 26

The Confederation of Finland wins close to 19 percent of the vote in the European elections and takes home three seats. The Social Democratic LSDP gets about 15 percent of the vote, giving the party two seats. The third largest party, the alliance of Lithuanian peasants and the Greens, also receives two seats.

Gitanas Nausėda elected president

May 26

The second round of the presidential election ends with Gitana’s Nausėda winning just over 65 percent of the vote against Ingrida Šimonytė, who gets almost 33 percent. Nausėda has promised to work to bridge the deep income gaps in the country and to try to improve relations with Russia, provided Moscow changes its Ukraine policy. Nausėda replaces the popular Dalia Grybauskaitė, called the Iron Lady after its hard line towards Russia. The presidential elections are held on the same day as the EU elections. Nausėda will take over as President on July 12.

Skvernelis voted in the presidential election

May 12

In a first round of the presidential election, former finance minister Ingrida Šimonytė wins with very little margin – she gets 31.4 percent of the vote compared to 31.2 percent for economist Gitanas Nausėda. A second round of elections will be held between them on May 26. However, Prime Minister Saulius Skvernelis, who receives 19.9 percent of the vote, does not go further. He will therefore, as he previously announced, resign as head of government on July 12.


Prime Minister Skvernelis wants to stand in the presidential election

January 17

Lithuania’s Prime Minister Saulius Skvernelis announces that he plans to run in the May 12 presidential election. He is said by judges to have great support within his party’s alliance of Lithuanian peasants and the Greens, who will formally appoint a presidential candidate at the end of January.

Lithuania Industry

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