Lithuania’s economy has been exceptionally resilient in a volatile year
Minister of the Economy and Innovation Aušrinė Armonaitė presented the main achievements of 2023, including the implementation of the EUR 1 billion plan for the Lithuanian economy, the strengthening of trade relations with foreign partners, and the development of the innovation and start-up ecosystem. Attracting foreign direct investment is also one of the areas where significant results have been achieved.
“Despite the many instabilities in the world and a slowing economy, Lithuania and our economy have withstood many challenges this year. Our economy remained resilient. The Ministry’s main task has been to support business, to create opportunities for growth and strengthening. This year, business has actively sought to invest in the future. This is very good news, because a strong business and economy is our foundation for strengthening the state and its defence,” said Minister of the Economy and Innovation A.Armonaitė.
This year we have managed
“This year we have managed to attract 31 foreign direct investment projects, which will contribute to the creation of more than 2,500 jobs and an investment of 110 million euros. “In this way, we are creating more opportunities for Lithuanian citizens and investors, contributing to Lithuania’s economic growth and the country’s success in competing on the global market,” said A. Armonaitė.
Another investment agreement – the eleventh – for a major project was also signed. The current agreements will help create more than 3,500 jobs and attract investments worth EUR 688.88 million. It is expected that at least several more major project agreements will be signed in the near future.
The Ministry of the Economy and Innovation
The Ministry of the Economy and Innovation has already announced more than €918.5 million of the nearly €1 billion in financial support planned by the end of this year to strengthen Lithuania’s economy. Almost 3,000 companies have applied for financial instruments.
“One of the main objectives of the €1 billion financial support is to help businesses this year to modernise and digitise services, develop new products, invest in innovation and renewable energy. We have already announced 51 out of 59 calls for proposals to achieve this goal, so we invite businesses and institutions to continue investing to adapt to changing circumstances and contribute to building a stronger Lithuania,” said A.Armonaitė.
Lithuanian start-ups
Among this year’s results, the achievements of Lithuanian start-ups should also be mentioned. Currently, there are more than a thousand start-ups in Lithuania, valued at EUR 9.5 billion. To further strengthen the country’s startup ecosystem, Plug and Play, an international accelerator from the US, has been attracted to Lithuania and will help 60 startups grow over three years. Other specialised accelerators are planned in the fields of information and communication, games and educational technology. EIMIN has currently launched acceleration and pre-acceleration programmes worth €64 million.
Lithuania is successfully strengthening its relations with its partners abroad by reinforcing its network of commercial attachés and sales representatives, which now includes a team of 20 people and will soon be joined by a commercial attaché in Italy.
A. Armonaitė, together with the Minister of Transport and Communications, Marius Skuodis, and the Mayor of Vilnius, Valdas Benkunskas, also signed a historic agreement on the promotion of routes important for business and inbound tourism. The aim of the agreement is to unite and coordinate the capacities of various institutions to ensure sustainable flight and passenger flows on strategic routes. It is expected that more flights will soon be available to destinations of interest to Lithuanian citizens and tourists.
The tourism sector
The tourism sector is also recovering, as evidenced by the growing number of foreign tourists. By October 2023, 1.15 million foreign tourists had stayed in Lithuanian accommodation establishments. Compared to the same period last year, the number of foreign tourists increased by 18%.
Strengthening the country’s defence and security industry is one of the key objectives for the year. To this end, Minister of the Economy and Innovation Aušrinė Armonaitė, Minister of Foreign Affairs Gabrielius Landsbergis, Minister of Defence Arvydas Anušauskas and Minister of Interior Agnė Bilotaitė signed the Guidelines for the Development of the Defence and Security Industry in Lithuania 2023-2027. This initiative contributes to realising the potential of the Lithuanian defence and security industry, which has become particularly important since Russia started the war in Ukraine.
The development of the Lithuanian defence industry
To accelerate the development of the Lithuanian defence industry, EIMIN is also already implementing a venture capital facility, MILInvest (€13.5 million). It is also investing in breakthrough technology start-ups in selected NATO areas (€1 billion) and implementing the NATO Defence Innovation Accelerator DIANA (€30 million) to support the development and acceleration of breakthrough technologies.
Importantly, EIMIN adopted the National List of Controlled Dual-Use Goods, which further restricts the export of goods from Lithuania to third countries and prohibits the transit of goods through the territories of Belarus and Russia in order to limit the technical capability of Russia and Belarus to conduct hostilities in Ukraine, which in turn threaten the security of Lithuanian society.
Free Economic Zones
Another development is the amendments to the Law on the Framework of Free Economic Zones adopted this year, which will allow defence and security industries to operate in free economic zones. The amendments will lift the ban on activities related to national security and defence in FEZs from 2024.
Important changes have also been initiated to contribute to a more sustainable Lithuania. Planned funding for the development of renewable energy sources has been tripled, with €31.87 million allocated to 226 industrial companies instead of the planned €10 million. In addition, a law to reduce food waste has been initiated.
To strengthen the country’s entrepreneurial spirit, EIMIN has proposed tax reform amendments to improve the business and labour environment and increase the country’s competitiveness, and the Small Entrepreneurs’ Bill will be launched in 2024, which will reduce the tax burden on self-employed persons.
Lithuania is also successfully entering the digital phase with the completion of the digital transformation of the state’s digital resources, which has established a qualitatively new governance model in line with modern information technology trends. Lithuania’s data is stored in both private and public networks.
Lithuania’s rise in international rankings
Lithuania’s rise in international rankings has been recorded. We moved from 39th to 34th place in the World Innovation Index, from 8th to 7th place in the European e-government ranking, and from 26th to 23rd place in the IMD World Talent Ranking. We also saw record investment in R&D, with €690.7 million spent on research and experimental development.
This year’s focus was on support for Ukraine, with the completion of a mobile settlement in Borodianka, the opening of a renovated kindergarten in Irpinia, the renovation of a school in Borodianka and the upgrading of the electricity grid in Mykolaiv. The projects “School of the Future for Ukraine” and “Digital Urban Planning 3D Tool” are also being implemented.
Digitisation of public and administrative services, investment in innovation and renewable energy will remain EIMIN’s priorities in the coming years. The aim remains to strengthen economic interests in the world, improve the country’s image and business environment.