Lithuania Business News: Archive 2003-
Saturday, 13th of June
Wants almost LTL 1 million
Latvia's air carrier Airbaltic and Riga Airport demand that the seizure of almost LTL 200 million in their assets, imposed by Lithuanian courts at the request of no longer functioning Lithuanian flagship carrier FlyLAL-Lithuanian Airlines, should be recalled. Moreover, Airbaltic and Riga airport demand LTL 852,800 (EUR 247,000) in damages from the Lithuanian government and urge to open negotiations on the matter under a bilateral investment agreement in six months.
Fines for cartel were cancelled
The Lithuanian Supreme Administrative Court on Thursday cancelled a fine of LTL 824,800 imposed on Rokiskio Suris, one of Lithuania's largest dairy producers. The court's decision is final and not subject to appeal. The Vilnius Regional Administrative Court last August rejected an appeal filed by Rokiskio Suris against the fine. The company then appealed against the court's decision. In February 2008, the Competition Council slapped seven Lithuanian dairy companies with fines ranging from LTL 7,000 to LTL 865,900 for exchanging "non-statistical and confidential" information. The other six dairies fined by the competition watchdog were Pieno Zvaigzdes (LTL 865,900), Marijampoles Pieno Konservai (LTL 256,500), Vilkyskiu Pienine (LTL 183,000), Kelmes Pienine (LTL 76,000), Kelmes Pieno Centras (LTL 21,700) and Modest (LTL 7,000).
No purchase by leasing
It has been sold 1,400 new cars by leasing in Lithuania during five months this year, which is by 83 percent less than during the same period last year. This May it was sold only 257 new cars in Lithuania, which is by 85 percent less than last May.
Friday, 12th of June
Star1 Airlines, the airline arm of Lithuania's tour operator Star Team Group, will launch regular flights from Vilnius to London early in July. Moreover, the company will also open direct routes from the Lithuanian capital to Dublin and Barcelona. Star1 Airlines would offer four weekly flights to London, three to Dublin and two to Barcelona. The first flight to London has been scheduled for July 3. A modern Boeing airplane to be operated by the company is expected to land in Vilnius Airport next week. Later the company will add another Boeing to its fleet.
Prime minister confirmed that Barclays invests
Prime Minister Andrius Kubilius has confirmed officially that Lithuania intends to sign a deal with UK Barclays bank next week. "It seems that an agreement with Barclays, one of the leading banks in the world, may be signed concerning the establishment of their service center in Lithuania - this will be a computer-based service center. This will be one of the key steps for attracting other investments as well. Attracting investments by such well-known names offers a chance to prove to other investors that they would make a mistake by not following the suit," Kubilius said in an interview to the news radio station Ziniu Radijas on Thursday. He expressed his belief that the agreement would be signed successfully next week. "It concerns the investment of several hundreds of millions of litas, several hundreds of jobs for high-skilled high-tech experts." The Economy Ministry and Barclays are expected to sign a letter of intent on the establishment of an IT center in Vilnius on June 15.
Funds for renovation
Lithuania and the European Investment Bank (EIB) have signed a financing agreement on the establishment of a holding fund, which is now worth LTL 785 million. The document was signed by Finance Minister Algirdas Semeta, Environment Minister Gediminas Kazlauskas and EIB Vice-President Matthias Kollatz-Ahnen. The holding fund is being established within the implementation framework of JESSICA (Joint European Support for Sustainable Investment in City Areas), an initiative of the European Commission (EC), EIB and the Council of Europe Development Bank on the promotion of sustainable investment, and growth and jobs, in Europe's urban areas. Lithuania's authorities seek to use the opportunities offered by the initiative for the financing of investment projects on the renovation of apartment blocks.
Lietuvos Zinios, Lietuvos Rytas, Verslo Zinios
Thursday, 11th of June
Are going to cut budget once more?
Lithuania's government has opened consultations on the reduction of public sector expenditures and revenues - the second this year. Justice Minister Remigijus Simasius and Social Security and Labor Minister Rimantas Dagys confirmed that the consultations had been launched. They would not specify the scale of reduction, however. Prime Minister Andrius Kubilius said earlier on Wednesday that the revenues and expenditures of the public sector would be further trimmed by about LTL 2 billion this year. In May the parliament approved the budget cuts exceeding LTL 3 billion. The government leaders then said that a new revision of expenditures and revenues would be held in June, and the budget might be cut by approximately LTL 1.5-2 billion.
Lietuvos Rytas, Verslo Zinios
Deepened the bottom
Lithuanian Prime Minister Andrius Kubilius said on Wednesday that the Finance Ministry's forecast of a 10.5 percent economic contraction this year now seems to be too optimistic. The central Bank of Lithuania's latest forecast of a 15.6 percent GDP decline in 2009 looks more realistic to him. "The situation with forecasts this year is the same everywhere: they are reliable for around three months and then they are revised downwards. The Finance Ministry's experts, in informal conversations, do not reject the Bank of Lithuania's forecasts," Kubilius told reporters on Wednesday. Verslo Zinios
Number of Verslo Zinios
Average hourly labor costs in Lithuania's manufacturing, construction and services companies, including sole proprietorships, rose by 4.1 percent in the first quarter of this year compared with the same period last year, the Statistics Department reported on Wednesday. The rate of growth slowed down this year, compared with 13.9 percent in the fourth quarter of 2008, it said. The growth was slower in all manufacturing, construction and services companies.
Wednesday, 10th of June
By LTL 36 million more than planned
The Lithuanian central government collected LTL 5.993 billion in budget revenues during the first five months of this year, exceeding its revenue target for the period by LTL 36.3 million, or 0.6 percent, the Finance Ministry reported on Tuesday. Total revenues for January through May, including assistance funds from the EU and other foreign countries, amounted to LTL 8.711 billion, it said. Revenues from the value-added tax, which is the single largest source of budget revenues, came in at LTL 2.968 billion, or 1.8 percent above the projected level. The corporate profit tax generated LTL 435.5 million in revenues, or 0.2 percent less than planned. Revenues from excise taxes, at LTL 1.244 billion, were 0.3 percent above the target. The personal income tax generated LTL 1.606 billion in national budget revenues -- in line with projections. The national budget includes both central government and municipal budgets.
Trade with foreign countries shrinks
Lithuania's exports fell by 29.3 percent in the first four months of this year from a year earlier, to LTL 12.459 billion, while imports slumped by 43.8 percent, to LTL 13.849 billion, the Statistics Department reported on Tuesday. The country's foreign trade deficit narrowed by 80.3 percent over the reporting period, to LTL 1.389 billion, according to preliminary data based on customs declarations and Intrastat reports. In April, compared with March, Lithuania's exports shrank by 3.8 percent, while imports declined by 11 percent. Russia remained Lithuania's biggest export partner in the four-month period, accounting for 12.5 percent of all exports, followed by Latvia with 10.2 percent, Germany with 9.3 percent and Estonia with 6.6 percent.
Lietuvos Rytas, Respublika, Lietuvos Zinios
To rethink crediting policy
Excessive credit tightening by banks is adding to the economic slowdown in Lithuania, Prime Minister Andrius Kubilius said on Tuesday. "We are not convinced by explanations given by bank managers, who say that credit volumes are decreasing because the economy is contracting. We think that there is an opposite causality: the economy is contracting because credit volumes are reduced," Kubilius told Lithuanian Radio. "The government is doing all it can to inject additional credit resources into the economy by using the EU's money, but we expect that banks will find ways to rethink their policies and business prospects as well," he added. However, the prime minister acknowledged that previously loans had been too easily accessible.
Verslo Zinios, Respublika
Tuesday, 9th of June
The number of loans will drop
Aggregate loan portfolio of Lithuanian commercial banks and foreign bank branches might decline by 15-16 percent this year, to approximately LTL 60 billion, unless the situation on the market improves, Stasys Kropas, president of the Association of Lithuanian Banks (LBA), warns. The overall loan portfolio of the banks shrank by 4 percent in January-April, he said after the meeting with Prime Minister Andrius Kubilius on Monday. The issues discussed during the meeting included the effects of changes in banking crediting volumes on domestic economy and the effects of economic slowdown on crediting activities of the banks, Kropas said.
Prices fell in May
Lithuania's consumer prices edged down by 0.2 percent in May compared with April, the Statistics Department reported on Monday. The 12-month inflation rate in May eased to 5.2 percent and the average annual inflation rate was down to 9.4 percent, it said. The monthly decline in the consumer price index (CPI) was mostly due to lower prices for food products and non-alcoholic drinks (down 0.6 percent), prices for housing, water, electricity, gas and other fuels (down 0.7 percent) and clothing and footwear prices (down 1.1 percent). Prices for consumer goods fell by 0.1 percent in May versus April and prices for consumer services went down by 0.4 percent. Year-on-year, prices rose by 4.3 percent and 8 percent, respectively.
Another 5,500 unemployed
Another 5,500 people were registered as unemployed in Lithuania last week, down 2 percent from 5,600 people registered a week earlier, the country's Labor Exchange said on Monday. The total number of people with the status of unemployed persons reached 192,600 as of Jun. 6 (up from 190,000 a week earlier), which accounted for 9 percent of the working age population. Some 1,531 job vacancies were registered in May 29 through June 6, up 17.6 percent from 1,302 vacancies a week earlier. Some 2,500 people got employed, down 16.7 percent week-on-week. There were around 1,300 vacancies in the Labor Exchange database on June 6.
Lietuvos Rytas, Respublika
Monday, 8th of June
Glitch is only an excuse for repairs
The sole operating reactor of Lithuania's Ignalina Nuclear Power Plant (INPP) shut down after glitch on Saturday prompting the plant's authorities to put the turnaround forward. The reasons of the failure were still unknown, INPP CEO Viktor Shevaldin said. "They will be established by a special panel", he said. The turnaround of the facility would last till July 5, Shevaldin added. Lietuvos Energija (Lithuanian Energy), the Lithuanian power transmission system operator, reported that the INPP reactor shut on Saturday at 9:18 a.m. after the alarm went off, and the controllers of the company took all the measures required to eliminate the disbalance of power. Imports of electricity from neighbouring energy systems were launched immediately, and the output of Lietuvos Elektrine (Lithuanian Power Plant, or LPP) was raised thus preventing any disruptions in the supply of electricity to consumers. Initially the maintenance of INPP was scheduled to last from August 29 till September 27. Lietuvos Rytas
Producer prices grow
Lithuania's producer prices plunged by 15.1 percent in May year-on-year, the country's Statistics Department reported on Friday. Compared with April, the wholesale prices rose by 0.7 percent last month. With petroleum products excluded, producer prices shrank by 5.5 percent year-on-year and by 0.3 percent month-on-month, the department said. Prices of products sold on the domestic market firmed by 0.1 percent in May versus April. Excluding oil products, the prices slid by 0.3 percent Overall export prices climbed by 1.4 percent. Excluding oil products, export prices were down by 0.3 percent last month.
Sales of Rokiskis Cheese dropped
Rokiskio Suris (Rokiskis Cheese), one of the biggest dairy groups in Lithuania, said on Friday that its sales revenue for the first five months of this year fell to LTL 226.272 million, down 8.8 percent from LTL 247.983 million a year ago. The group's monthly sales for May dropped by 19.6 percent year-on-year to LTL 47.892 million, Rokiskio Suris reported. The dairy producer has said that this year it targets a profit margin of around 1-2 percent and projects LTL 583 million in annual revenue. It has earmarked LTL 5 million for investments this year, down from LTL 40.6 million last year.
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