SUMMARY OF THE RESULTS
• According to the Survey of the Lithuanian Economy, the year 2011 ended fulfilling market participants’ projections: market participants revised their 2011 estimates insignificantly, but they reduced their 2012 forecasts. The experts polled by LFMI think that GDP grew by 4.3 percent in 2011; the 2012 forecast of GDP growth was slashed from 4.6 to 2.7 percent.
• Market participants estimate that the rate of unemployment stood at 14.8 percent at the end of 2011 and will be 14.1 percent at the end of 2012. Consumer prices climbed by 3.9 percent in 2011 and are expected to surge by 3.8 percent in 2012.
• According to the survey, 33 percent of respondents think that the euro problems and the related risk of export slump are the major sources of risk for companies; 29 percent of those polled consider potential changes (increases) in taxes to be a serious source of uncertainty; 25 percent are of the opinion that the election year and politicians’ populist decisions will be a significant source of incertitude. The sum of the latter two answers allows stating that most of the uncertainty and risks – 54 percent – stem from government’s potential actions, not from the market itself.
• Lithuania’s foreign trade grew at an especially high rate in 2011, but the growth will somewhat moderate in 2012, although it will remain double-digit. Exports are expected to rise by 11 percent and imports will surge by 12 percent in 2012.
• As the LFMI survey shows, the share of the shadow economy accounted for 27 percent of GDP in 2011. No changes in the informal sector are awaited in 2012: the share of the shadow economy will comprise 27 percent of the country’s GDP. The experts polled think that 37 percent of businesses were at least in part involved in illicit activity in 2011 and this figure is expected to go down insignificantly, to 36 percent, in 2012.
• The LFMI survey shows that earnings, household income and household savings rose in 2011. Market participants believe that household income will continue to grow in 2012, albeit at a lower rate compared to 2011. After undergoing a 4-percent rise in 2011, average net earnings will increase by 4 percent in 2012 and household income will see the same growth. Households saved 13 percent of their disposable monthly income in 2011 and will continue so to doing so in 2012.
• The survey of the Lithuanian economy shows that the profit margin increased in 2011, which is a third consecutive year of growth. The profit margin is expected to decline in 2012. Market participants think that the profit margin averaged about 4.5 percent in 2011 and is expected to average 4.2 percent in 2012.
• A total of 56 percent of respondents indicated that they feel no changes as regards the behaviour of institutions of control; 30 percent of those polled reported that changes were visible and in tune with the goals of the reform of business controlling institutions; 14 percent think that changes are taking place, but they do not correspond to the goals of the reform.
• According to the survey, 11 percent of Lithuanian businesses intend or seriously consider a possibility to transfer activity abroad.
• The analysis of four international surveys of the investment climate demonstrates that Lithuania scores highest in the categories ‘Tax system and tax rates, size of government’ and ‘Regulation’. The lowest scores are for ‘Economic stability’ and ‘Infrastructure, market size and development, financial markets, technological readiness’. At the tail-end is the group ‘Administrative burden, bureaucracy, corruption’ which directly depends on government’s policies.
29TH SURVEY OF THE LITHUANIAN ECONOMY (PDF)