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Lithuanian lands were united under MINDAUGAS in 1236; over the next century, through alliances and conquest, Lithuania extended its territory to include most of present-day Belarus and Ukraine. By the end of the 14th century Lithuania was the largest state in Europe. An alliance with Poland in 1386 led the two countries into a union through the person of a common ruler. In 1569, Lithuania and Poland formally united into a single dual state, the Polish-Lithuanian Commonwealth. This entity survived until 1795 when its remnants were partitioned by surrounding countries. Lithuania regained its independence following World War I but was annexed by the USSR in 1940 - an action never recognized by the US and many other countries. On 11 March 1990, Lithuania became the first of the Soviet republics to declare its independence, but Moscow did not recognize this proclamation until September of 1991 (following the abortive coup in Moscow). The last Russian troops withdrew in 1993. Lithuania subsequently restructured its economy for integration into Western European institutions; it joined both NATO and the EU in the spring of 2004. In January 2014, Lithuania assumed a nonpermanent seat on the UN Security Council for the 2014-15 term; in January 2015, Lithuania joined the euro zone.

Location

Eastern Europe, bordering the Baltic Sea, between Latvia and Russia, west of Belarus

Natural Resources

peat, arable land, amber

Population - distribution

fairly even population distribution throughout the country, but somewhat greater concentrations in the southern cities of Vilnius and Kaunas, and the western port of Klaipeda

2944459
Lithuanian (official) 82%, Russian 8%, Polish 5.6%, other 0.9%, unspecified 3.5% (2011 est.)
VILNIUS (capital) 517,000 (2015)
Conventional long form
Republic of Lithuania
Conventional short form
Lithuania
Local long form
Lietuvos Respublika
Local short form
Lietuva
semi-presidential republic
Name
Vilnius
Geographic coordinates
54 41 N, 25 19 E
Time difference
UTC+2 (7 hours ahead of Washington, DC, during Standard Time)
Daylight saving time
+1hr, begins last Sunday in March; ends last Sunday in October
accepts compulsory ICJ jurisdiction with reservations; accepts ICCt jurisdiction
After the country declared independence from the Soviet Union in 1990, Lithuania faced an initial dislocation that is typical during transitions from a planned economy to a free-market economy. Macroeconomic stabilization policies, including privatization of most state-owned enterprises, and a strong commitment to a currency board arrangement led to an open and rapidly growing economy and rising consumer demand. Foreign investment and EU funding aided in the transition. Lithuania joined the WTO in May 2001, the EU in May 2004, and the euro zone in January 2015, and is now working to complete the OECD accession roadmap it received in July 2015.
Inflation
0.906%
External debt stocks
US$ 29,988,119,000
Total tax rate (% of commercial profits)
42.7%
Real Interest Rate
3.527%
Manufacturing, value added (% of GDP)
18.966%
Current Account Balance
US$ -398,015,961
Labor Force, Total
1,453,453
Employment in Agriculture
9.07%
Employment in Industry
25.07%
Employment in Services
65.86%
Unemployment Rate
9.19%
Imports of goods and services
US$ 31,411,920,977
Exports of goods and services
US$ 31,774,351,584
Total Merchandise Trade
122.00%
FDI, net inflows
US$ 377,310,445
Commercial Service Exports
US$ 7,474,516,732
grain, potatoes, sugar beets, flax, vegetables; beef, milk, eggs, pork, cheese; fish
metal-cutting machine tools, electric motors, televisions, refrigerators and freezers, petroleum refining, shipbuilding (small ships), furniture, textiles, food processing, fertilizer, agricultural machinery, optical equipment, lasers, electronic components, computers, amber jewelry, information technology, video game development, app/software development, biotechnology
Commodities
refined fuel, machinery and equipment, chemicals, textiles, foodstuffs, plastics
Partners
Russia 13.7%, Latvia 9.8%, Poland 9.7%, Germany 7.8%, Estonia 5.3%, Belarus 4.6%, UK 4.5%, US 4.4%, Netherlands 4% (2015)
Commodities
oil, natural gas, machinery and equipment, transport equipment, chemicals, textiles and clothing, metals
Partners
Russia 16.9%, Germany 11.5%, Poland 10.3%, Latvia 7.6%, Netherlands 5.1%, Italy 4.5% (2015)
Country Risk Rating
A3
Changes in generally good but somewhat volatile political and economic environment can affect corporate payment behavior. A basically secure business environment can nonetheless give rise to occasional difficulties for companies. Corporate default probability is quite acceptable on average.
Business Climate Rating
A3
The business environment is relatively good. Although not always available, corporate financial information is usually reliable. Debt collection and the institutional framework may have some shortcomings. Intercompany transactions may run into occasional difficulties in the otherwise secure environments rated A3.
  • Eurozone membership (since January 2015)
  • Upcoming membership of OECD
  • Solid public and external accounts
  • Banking system controlled by Scandinavian institutions
  • Transit point between the European Union and Russia
  • Diverse energy supply
  • Shrinking active population (emigration of young skilled people)
  • High level of structural unemployment
  • Extreme disparity between the capital and the regions, especially in the north-east
  • Limited added value of exports
  • Lack of productivity and competitiveness
  • Large underground economy (26% of GDP)

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