Lithuania-UK economic relations
Implications of Brexit
Aleksandr Izgorodin
Director, Foreign Relations Department
Lithuanian Confederation of Industrialists
22 July 2016
Brexit implications – housing market
Source: Financial Times
Brexit implications – investment intentions
Source: Financial Times
Brexit implications – business confidence
Source: Financial Times
Brexit implications – consumer confidence
Source: Financial Times
Brexit implications – GBP exchange rate
Brexit implications – EU was good for Britain
Source: Financial Times
Brexit implications – long-term effect
Source: Financial Times
UK is Lithuania’s 6th largest trade partner
Lithuania-UK trade turnover, mln. EUR
2500
2010
1996,1
2000
1831
1777,8
1500
1175
1141
1051,2
1000
734,7
500
0
2008
2009
Source: Lithuanian Statistics Department
2010
2011
2012
2013
2014
2015
Trade with UK accounts for 6% of Lithuania’s trade with EU,
and almost 4% of total Lithuanian foreign trade
Share of LT-UK trade in total LT trade turnover, %
8,0%
7%
7,0%
7%
6%
6,0%
6%
5%
5%
5%
5,0%
5%
4,2%
4,0%
4,0%
3,7%
3,6%
3,1%
3,0%
2,9%
3,2%
2,7%
2,0%
1,0%
0,0%
2008
2009
2010
2011
2012
2013
Share of LT-UK trade turnover in total LT trade turnover, %
Share of LT-UK trade turnover in total LT trade turnover with EU, %
Source: Lithuanian Statistics Department
2014
2015
Lithuania tends to have positive trade balance with UK
LT-UK trade balance, mln. EUR
1000
889,5
800
589
600
488,4
430,2
400
346,4
301,3
277,6
200
0
2008
2009
-200
-400
Source: Lithuanian Statistics Department
2010
2011
2012
2013
2014
-173,6
2015
Almost 4% of Lithuanian exports go to UK
Value of Lithuanian export to UK, mln. EUR
1600
1442,8
1400
1210
1200
1027,7
1000
800
918,2
769,8
743,7
600
802,6
518
400
200
0
2008
2009
Source: Lithuanian Statistics Department
2010
2011
2012
2013
2014
2015
Lithuanian export to UK is dominated by mineral fuels
Structure of Lithuanian export to UK, 2015, %
Mineral fuels
Furniture
22,4
25,4
Fertilizers
Wood and articles of wood
Plastics and articles thereof
2,3
Articles of apparel and clothing accessories
2,5
Residues and waste from the food industries
2,7
3,0
16,3
3,9
Articles of apparel and clothing accessories,
knitted or crocheted
Other goods
4,5
5,0
Source: Lithuanian Statistics Department
Optical, measuring, precision, medical or
surgical instruments
Preparations of cereals, flour, starch or milk
11,9
UK is 11th largest investor in Lithuania
Accumulated FDI into Lithuania, mln. EUR, 2015
3500
3182,2
3000
2500
2000
1671,01
1500
1278,14
1000
859,91
708,59
587,58
546,23
500
513,58
510,72
448,38
426,09
Malta
United
Kingdom
0
Sweden Netherlands Germany
Source: Lithuanian Statistics Department
Norway
Poland
Estonia
Finland
Switzerland Denmark
Lithuania is becoming increasingly popular among British
investors
Foreign direct investment from UK into Lithuania, mln. EUR
450
426,09
400
367,77
350
300
250
221,95
207,22
193,33
200
179,91
174,46
162,68
139,19
150
119,84
113,82
2005
2006
118,22
100
50
0
2004
Source: Lithuanian Statistics Department
2007
2008
2009
2010
2011
2012
2013
2014
2015
23,01
Source: Lithuanian Statistics Department
0
3,78
3,75
3,35
Transportation and storage
Administrative and support service
activities
12,02
Agriculture, forestry and fishing
12,53
Professional, scientific and technical
activities
18,6
Construction
Information and communication
50
Real estate activities
59,05
Manufacturing
Wholesale and retail trade; repair of
motor vehicles and motorcycle
Financial and insurance activities
Majority of British investments in Lithuania accumulated
into financial sector
Foreign direct investment from UK into Lithuania, mln. EUR
250
221,15
200
150
100
47,69
Brexit: implications for Lithuania
Brexit: negative implications for Lithuania:
1. Direct effect: losses in export as a consequence of devaluation in British Pound
and UK recession. Most affected Lithuanian sectors – furniture; wood and
timber; textile and clothing; food and beverages.
2. Indirect effect: loss of business confidence in UK and EU in general, and high
uncertainty levels.
3. Lower amount of remittances from UK to Lithuania. Remittances from UK to LT
account for approx. 375 mln. EUR annually, or 1% of LT GDP.
Potential positive effect:
1. Theoretical possibility to attract more FDI from UK to LT. This is subject to
quality of business climate and competition with other countries.
Thank you for your attention!