Lithuania Business News: Archive 2003-
Saturday, 16th of May
It has been ordered to take trousers down
The Lithuanian Energy Ministry has said it does not agree to a proposal by the management board of the national energy company Leo LT to reduce electricity prices at producers' expense. The ministry believes that Leo LT is thus overstepping its competence and asks the company's supervisory board to recommend that the management board look for reserves within Leo LT and its subsidiaries. Leo LT proposes to reduce the electricity production price by LTL 0.04 - the amount by which the company is expected to lower the price for end-users.
Construction business is disappearing
Lithuanian building companies carried out construction work for a total of LTL 1.321 billion during the first quarter of this year, a decline of 42 percent on the same time last year, the Statistics Department reported on Friday. The total value of construction work performed within the country reached LTL 1.283 billion and the value of construction work carried out abroad was LTL 38 million, based on preliminary data.
It was negotiated to reactivate ports
Lithuania asks for about 2 million tons of additional cargo for Lietuvos Gelezinkeliai in exchange for railway tariff discounts for certain types of cargo as requested by Russia. Russia Transport Minister Igor Levitin claimed that they want to restore cargo flows to the port of Kaliningrad back to the level of 2008. Experts from Lithuania, Russia and Belarus met in Klaipeda on Friday. Lithuania's and Russia's transport ministers approved a protocol on the rates of cargo transportation by rail. Freight delivery to Russia's exclave of Kaliningrad via Lithuania declined by half in the first quarter of this year compared with the last year.
Friday, 15th of May
Will drop by 15.6 percent
The Bank of Lithuania predicts that the economy will slump by 15.6 percent this year and will contract by another 4.5 percent next year. The central bank in January forecast a 4.9 percent GDP contraction for 2009 and a 3.9 percent decline for 2010. Based on the latest forecasts released on Thursday, the country's average annual inflation rate should reach 3.9 percent this year before turning into a minus 2.1 percent next year. This is down from the earlier projections of 5.8 and 4.4 percent inflation, respectively. The central bank's unemployment forecasts have been revised upwards to 11.6 percent from 10.2 percent for 2009 and to 13.4 percent from 11.6 percent for 2010. Wages are expected to drop by 12.3 percent this year, compared with the previous forecast of a 0.2 percent slip, and fall by another 5.2 percent next year, unchanged from January's forecast.
Lietuvos Rytas, Verslo Zinios, Respublika
The losses of Mazeikiai Oil
Lithuania's only oil refinery Mazeikiu Nafta (Mazeikiai Oil), which is controlled by Poland's PKN Orlen, on Thursday reported LTL 48.5 million in consolidated net losses for the first quarter of this year, up from LTL 6.6 million a year earlier. Revenues for the first quarter dropped by 38.9 percent year-on-year to LTL 2.2 billion. Operating losses (EBIT) fell to LTL 2 million; four times lower than those in the same period last year, the company said in a press release. It attributed the quarterly losses to weaker fuel consumption due to the global crisis and to low refining margins. The refinery processed 2.2 million tons of crude oil and other feedstock during the first three months of this year, up from 2.1 million tons a year earlier.
Verslo Zinios, Respublika
The number of passengers fell
Latvia's national airline Airbaltic carried 64,540 passengers to and from Vilnius Airport in January-April, down 2.9 times from 188,000 passengers a year earlier. In April alone, the number of passengers carried by the company to and from Lithuania's capital plummeted almost fourfold, to 13,200, from 51,200 in April 2008, Airbaltic reported. The load factor for the company's aircraft taking off from Vilnius in April made up 62 percent, up 7 points year-on-year.
Lietuvos Rytas, Verslo Zinios
Thursday, 14th of May
Car market withdraws
New car registrations in the three Baltic countries slumped by 69 percent in the first four months of this year from a year ago to 9,750, Datacenter reported on Wednesday.
In April year-in-year, the Baltic new car market shrank by 68 percent to 2,700, the market research company said. Lithuania's new car market fell by 71 percent in the four months year-on-year to 3,100 units. Latvia posted a 75 percent decline to 2,300 and Estonia recorded a 62 percent drop to 4,300 units. In April alone, new car registrations in Lithuania slumped by 71 percent to 855, in Latvia, by 76 percent to 597, and in Estonia, by 59 percent to 1,300 units.
Gas will be cheaper for residents
Lithuania's natural gas import and transportation company Lietuvos Dujos (Lithuanian Gas), which is controlled by Germany's E.ON and Russia's Gazprom, is set to reduce natural gas prices for households by 14-19 percent starting July 1. The variable price component for consumers using up to 800 cubic meters per year will go down by 14.2 percent, to LTL 1.82 per cubic meter from LTL 2.12. Consumers using up to 20,000 cubic meters will pay LTL 1.28 per cubic meter, down 19 percent from LTL 1.58. For those using more than 20,000 cubic meters, the price will be reduced by 19.2 percent, to LTL 1.26 from LTL 1.56. The fixed price component will remain unchanged at LTL 2.22 per month for the first group of users and LTL 14.66 for the other two groups.
Lietuvos Rytas, Verslo Zinios, Respublika, Lietuvos Zinios
Milk has become cheaper by 36 percent
The average natural milk purchase price in Lithuania reached LTL 575.2 per ton in April, down by 36 percent compared with April 2008, the Agriculture Ministry reported on Wednesday. Compared with March, the price declined by 3.1 percent last month. The total volume of natural milk purchased from farmers in April dropped by 6.4 percent, year-on-year, to 90,530 tons, the ministry said.
Wednesday, 13th of May
Kubilius does not cut down pensions yet
Lithuanian Prime Minister Andrius Kubilius reiterated on Tuesday that the government does not plan to seek help from the International Monetary Fund (IMF) or cut pensions in the near future. "I have said repeatedly, 35 times or so, that we are not applying to the IMF today and do not plan to do so tomorrow; we are not cutting pensions today and do not plan to do so tomorrow," the prime minister told Lithuanian Radio. "Pensioners must have heard rumors themselves or have been told by someone that [the government will save funds] at the expense of pensions. We are not doing so yet and do not have such intentions," he said. "I can repeat this again and again, but I understand that people's worries are based on a very simple realization. People understand, very often better than opposition politicians, in what economic situation Lithuania is and they understand that, under these circumstances, the government has to look for ways to keep our financial system from going totally bankrupt," he said.
Verslo Zinios, Respublika
The value of pension funds rises
The value of Lithuania's second-pillar pension fund units rose by 4.58 percent on average over the four months of this year; the growth was 5.06 percent in April compared with March, the Securities Commission (VPK) reported on Tuesday. All pension funds operating in Lithuania registered an increase in unit value compared with the start of the year owing to a rally in global share prices that began in March, it said. The value of conservative investment pension fund units grew by 2.8 percent on average over the four months and that of funds with low exposure to equities went up by 3.56 percent. The value of units of medium exposure funds, which account for 55 percent of all private pension savers, rose by 5.13 percent and that of high exposure funds was up by 3.56 percent. The total value of investment portfolios of second-pillar pension funds reached LTL 2.597 billion at the end of April.
Respublika, Lietuvos Rytas, Verslo Zinios
Deficit has grown
Lithuania's State Social Insurance Fund (Sodra) on Tuesday reported a budget deficit of LTL 602 million for the first four months of this year, including LTL 244.8 million for April, based on preliminary data. The budget deficit for April was well above the LTL 71.1 million target due lower-than-planned revenues and higher-than-planned expenditures, Sodra said in a press release. Revenues for January through April totaled LTL 4.01 billion LTL 310.3 million, or 7.2 percent, less than projected, but LTL 548.2 million, or 15.8 percent, more than in the same period last year. Expenditures in the four months reached LTL 4.612 billion LTL 130.1 million, or 2.9 percent, higher than planned and LTL 816.4 million, or 21.5 percent, higher than a year ago.
Lietuvos Rytas, Verslo Zinios
Tuesday, 12th of May
The number of Verslo Zinios
Lithuanian TV stations saw their combined revenues fall by 20.3 percent in the first quarter of this year from a year earlier to LTL 36.1 million, the Radio and Television Commission (RTK) reported on Monday. Excluding the public broadcaster Lithuanian National Radio and Television (LRT) and the First Baltic Channel (PBK) from the overall figure, commercial TV stations posted a 17 percent drop in first-quarter revenues to LTL 32.3 million, it said. The revenue data are based on the amount of contributions paid by broadcasters to finance the supervisory body's activities.
Verslo Zinios, Lietuvos Rytas
Prices are beginning to slowly go down in the country
Lithuania's consumer prices edged down by 0.1 percent in April compared with March, the first monthly deflation since last December, the Statistics Department reported on Monday. The 12-month inflation rate in April eased to 6.3 percent and the average annual inflation rate was down to 9.9 percent, it said. The statistics office had forecast a zero monthly inflation rate, 6 percent annual inflation and 10 percent average annual inflation for April, as measured by the EU Harmonized Index of Consumer Prices (HICP). The monthly decline in April's CPI was mostly due to a 1.4 percent drop in prices for goods and services in the transport group, and a 0.5 percent decrease in food product and non-alcoholic drink prices.
Hobby Hall, the distance retailing company that is part of Finland's Stockmann Group, will discontinue its business in the Baltic countries by fall and will focus on operations in Finland. Hobby Hall's operations in the Baltic countries had failed to achieve a sufficient level of profitability throughout the present decade, Stockmann Group said in a statement. Discontinuation of the unprofitable Baltic business is part of the ongoing measures to improve Hobby Hall's financial performance.
Monday, 11th of May
Euros after 2-3 years
The Lithuanian central bank governor is optimistic about Lithuania's chances to join the eurozone and believes that Lithuanians will have euros in their wallets in two to three years' time. Reinoldijus Sarkinas admits that recurring attacks on the litas could be an attempt by certain forces to destabilize the situation. "Attacks on the litas are repeated almost every year. We cannot reject your assumptions [that financial or even geopolitical forces interested in destabilizing the situation could be behind those attacks]," the Bank of Lithuania's governor said in a interview with the Valstybe magazine. "I want to underline once again that the litas is tied to the euro and it is stable. Lithuania has committed itself to maintaining the stable euro-litas exchange rate up to the euro adoption. All litas in circulation are covered by foreign currency and gold reserves," he said. Sarkinas said that if the external conditions developed favorably, Lithuania could meet the Maastricht criteria for euro entry at the end of this year or early next year. "Therefore, it is realistic for us to expect to introduce the euro in 2011 or 2012. The sooner we adopt the euro, the better it will be for Lithuania," he said.
Verslo Zinios, Respublika
Slower becomes cheaper
Lithuania's producer prices plunged by 13.4 percent in April year-on-year, the country's Statistics Department reported on Friday. Compared with March, the wholesale prices eased by 0.2 percent last month. With petroleum products excluded, producer prices shrank by 4.1 percent year-on-year and by 1.7 percent month-on-month, the department said.
Estonians fly to Vilnius from June
Vilnius International Airport (VIA) and Sweden's airline Skyways have reached a deal on direct flights from the Lithuanian capital to Stockholm, Berlin, Amsterdam and Copenhagen. VIA spokeswoman Gabriele Vasiliauskaite on Friday said that a deal had been reached on flights from Vilnius starting June 2, but said that the airport and the Swedish airline had not yet signed their cooperation agreement. Lithuanian Deputy Transport Minister Arunas Staras said earlier in the day that, based on information provided to him by the airport's director, Tomas Vaisvila, the cooperation agreement had already been signed.
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