Growth in Goods Exports Would Have Been Even Higher Had It Not Been for the Poor Grain Harvest
According to Statistics Lithuania, total exports of goods increased by 7.3 per cent over 2018 to EUR 28.3 billion. Exports of goods of Lithuanian origin (excluding energy products) grew by 8.2 per cent to EUR 13.4 billion. Re-exports of goods (excluding energy products) grew by 5.1 per cent to EUR 10.7 billion.
“In evaluating the dynamics of Lithuanian-origin exports (excluding energy products) from the perspective of prices and volumes, it can be seen that in the first half of 2018, the impact of prices on export growth was minimal and growth was mainly driven by higher export volumes. The influence of prices on export growth got stronger in the second half of the year, and during the fourth quarter the price contribution to growth was already significantly higher than export volumes,” says Vadimas Ivanovas, head of the Research and Analysis Division at Enterprise Lithuania.
The greatest contributors to the growth in exports of goods of Lithuanian origin (excluding energy products) were the chemical industry (about 3 pp), the engineering industry (2.1 pp), the tobacco products industry (1.9 pp) and the furniture industry (1.1 pp).
“Agricultural products fared the worst last year – their contribution to export growth was negative (‑1.6 pp), mainly due to the 20 per cent lower grain harvest. Overall export growth was also slowed down (–0.2 pp) by food industry exports, which were down by almost one percentage point,” analyses Mr Ivanovas.
According to the head of the Enterprise Lithuania Research and Analysis Division, the 8.2 per cent increase in exports of goods of Lithuanian origin (excluding energy products) was in line with the forecasts presented by Enterprise Lithuania in summer 2018 (when 8.4 per cent growth was expected). “However, growth in re-exports of goods was slower than expected – we had predicted 6.1 per cent growth. The lower growth in re-exports was mainly driven by Russia’s slower economic development and the depreciation of the rouble against the euro,” says Mr Ivanovas.
In 2019, Lithuanian export performance will be greatly influenced by the deteriorating international environment. “At the end of summer last year, we predicted that growth in goods of Lithuanian origin and re-exports should accelerate this year, but international trade wars, decreased growth forecasts for the major Western European markets (especially Italy, Germany and the Netherlands), the increasing probability of a hard Brexit, and the slowdown in China’s economic growth are creating more and more challenges for Lithuanian exporters and decreasing the likelihood of faster export development,” says the Enterprise Lithuania analyst.
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