Lithuania Business News: Archive 2003-
Saturday, 11th of July
To Latvia by railways
Lietuvos Gelezinkeliai (Lithuanian Railways), the state-run railway operator, is looking for opportunities to boost the volumes of freight transportation amid decline in cargo flow from Russia and other CIS and Eastern countries. The executives of the Lithuanian company discussed possibilities to convey freight to Latvia as well as to Estonia and Russia via Latvia at the meeting with the representatives of Latvia's railway operator. The train drivers of Lietuvos Gelezinkeliai would hold examinations in safe traffic at the Latvian State Railway Technical Inspection in the nearest time, the Lithuanian company said in a statement.
Lietuvos zinios, Respublika
Deficit pressure is declining
According to the Statistics Department, Lithuania's exports in the first five months of this year fell by 30 percent year-on-year to LTL 15.621 billion, while imports slumped down by 43.6 percent to LTL 17.469 billion. The country's foreign trade deficit narrowed by 78.6 percent over the reporting period to LTL 1.849 billion. Excluding mineral products, the country's exports declined by 26.3 percent, while imports shrank by 45.1 percent. Jekaterina Rojaka, the senior analyst of the bank DnB Nord, claims that reduction of export is smaller than that of import, which is quite good.
Government debates how to cut payouts
Andrius Kubilius-led Lithuania's government has proposed to consider cutting of pensions for employed pensioners, state pensions and annuities as well as revising maternal allowances as it struggles to resolve problems with public finances. Pensions for employed pensioners could be cut by as much as 50 percent. Moreover, the government has proposed to trim all pensions and other social allowances by 5 percent. It is intended to reduce maternal (paternal) allowances by a tenth. In the first year maternal (paternal) allowance would constitute 85 percent of a salary, whereas in the second year it would make 50 percent of the previous salary.
Friday, 10th of July
Monthly deflation took its phase
Consumer prices slid 0.3 percent in Lithuania in June versus May, marking the third straight month of decline, the country's Statistics Department reported on Thursday. Annual inflation made up 4.2 percent, while the twelve-month average was 8.7 percent, it said. The department earlier projected that consumer prices would shrink by 0.2 percent in June versus May on a harmonized basis, while the annual inflation and the twelve-month average would make up 4 percent and 8.6 percent, respectively. In June the consumer price index (CPI) was largely influenced by the declines of 1.7 percent in the prices of food and soft drinks, of 2 percent in the prices of clothing and footwear and of 0.9 percent in the prices of housing, water, electricity, gas and other fuels. The drop was somewhat offset by the increases of 2.6 percent in the prices of transport goods and services and of 1 percent in the prices of healthcare goods and services.
Verslo Zinios, Lietuvos Rytas
Luxurious housing should be taxed first
Taxation of property worth more than LTL 1 million could add about LTL 60 million to Lithuania's coffers per year, Prime Minister Andrius Kubilius projects as the authorities consider a proposal to introduce an across-the-board property tax from 2011 at the earliest. "Those options, which have been considered until now, for example, not to tax property worth up to LTL 1 million... the implementation of legislation in this case would enable to add LTL 60 million to the national budget," he said in an interview to the news radio station Ziniu Radijas on Thursday. Real estate tax should boost the revenues of local authorities, he added. Kubilius would not forecast as to when the real estate tax could be introduced or what could be its rates. He added, however, that any decisions should not be hasty.
Verslo Zinios, Respublika
Expands in Palanga
Airbaltic is adding three weekly flights between the Lithuanian seaside resort of Palanga and the Latvian capital of Riga starting Jul. 21, the company said on Monday.
The Latvian airline will operate a total of 14 flights on the Palanga-Riga route, on all days of the week. "In April we launched the service from Palanga to Riga with eight flights and added six additional flights in three months to meet the demand," Tadas Vizgirda, Airbaltic's vice-president and head of the Lithuanian office, said in a press release on Thursday. "We notice that not only Lithuanians and Latvians, but also tourists from Germany, Russia and other countries are traveling on this route," he said.
Thursday, 9th of July
Plan producing half of electricity by themselves
Lithuania's power plants should generate about 4.5 billion kWh of electricity in 2010.
About two thirds of that volume - 3 billion kWh - should be produced by Lietuvos Elektrine (Lithuanian Power Plant, or LPP) and the remaining share - by thermal plants and the facilities generating power from renewable sources, the electricity market development plan as approved by the government on Wednesday stipulates. About 1 billion kWh will be purchased from the European Union (EU) suppliers and additional 3.6 billion kWh will be acquired at the auctions selling electricity generated in Scandinavia, Estonia, Latvia, Belarus, Ukraine and Russia. Lithuania's electricity needs are seen reaching about 9.1 billion kWh in 2010. The plan includes specific measures and guidelines on the supply of electricity to consumers starting from Jan. 1, 2010, i.e. after the shutdown of Ignalina Nuclear Power Plant (INPP). The market is expected to operate based on the Nord Pool principles. The plan also outlines the decisions required for the creation of a free market in the country, the Energy Ministry reported.
Lietuvos Zinios, Verslo Zinios
Lithuanian market is even more closed up than one in Bangladesh
Lithuania is ranked 40th out of 121 countries in the World Economic Forum's Global Enabling Trade Report 2009 released on Wednesday. Lithuania dropped five places compared with last year's Enabling Trade Index. In this year's index, Lithuania lags behind Estonia, which moved to 22nd place from last year's 25th spot, but is ahead of Latvia (down to 44th position from 43rd) and Poland (down to 57th spot from last year's 45th place). Countries were scored based on four main criteria: market access, border administration, transport and communications infrastructure, and the business environment. Lithuania is ranked 60th, 42nd, 36th and 41st in these categories, respectively. Latvia is ranked 44th, 39th, 39th and 43rd, Estonia is ranked 71st, 16th, 27th and 24th, and Poland is ranked 71st, 45th, 46th and 90th, respectively. The WEF's experts identified insufficient domestic and foreign market access (60th out of 121) and insufficient availability and quality of transport services (55th) among the key shortcomings hampering the improvement of Lithuania's trade competitiveness.
Prepare new budget
With structural reforms in the pipeline and tax collection unlikely to improve in the coming years, Lithuanian Finance Ministry is tentatively projecting budgets with deficits for 2010 through 2012. National budget revenues for this period should be almost stable at around LTL 23 billion, while spending is expected to decline for two successive years compared with 2010. Prime Minister Andrius Kubilius said during the Cabinet's meeting on Wednesday that the projections were quite realistic. The Finance Ministry projects that national budget revenues, including EU aid, next year will reach LTL 23.878 billion and expenditures will amount to LTL 29.721 billion.
Wednesday, 8th of July
Asked to take care
The European Union (EU) finance ministers gave Lithuania until 2011 to cut its budget deficit below the bloc's cap of 3 percent of gross domestic product (GDP), EU diplomats said. The same deadline was set for Romania and Hungary, while Poland and Latvia were told to cut their deficits to beneath the limit by 2012. Budget deficit is growing in the majority of EU Member States as the spending demands increase and revenues decline amid economic crisis. A budget deficit of not more than 3 percent of GDP is one of the criteria for joining the euro zone. The Commission expects 21 of the EU's 27 countries to have deficits above 3 percent of GDP this year. Last year Lithuania's fiscal deficit made up 3.2 percent of GDP. This year the rate may go up to 7-8 percent and in 2010 -to 13 percent if the government takes no measures.
Lietuvos Rytas, Verslo Zinios, Respublika
Canadian-registered Fermentas International, the owner of the largest Lithuanian biotechnology company Fermentas, raised the earnings before interest, taxes, deterioration and amortization (EBITDA) by 41 percent, year-on-year, to CAD 12.6 million last year. Annual sales increased by 25 percent, to CAD 47.7 million, the company said in a statement. "We have both large production capacities and a strong research center in Vilnius. Hence the sales volumes are growing much faster compared with new products development costs," the statement quoted Viktoras Butkus, Fermentas International CEO and chairman, as saying. Fermentas now produces and distributes more than 700 products designated for life science research and diagnostics.
The sales of Rimi Baltic drop
Rimi Lietuva, the operator of one of the largest Lithuania's retail chains, reported EUR 124 million in sales in Lithuania in January-June, down 7.3 percent year-on-year. In June alone, the sales of the chain contracted by 13.5 percent versus June 2008, to EUR 19.5 million, Rimi Lietuva said in a statement. Across the Baltic countries, the sales of Rimi Baltic group shrank by 5.9 percent, to EUR 599.1 million, in January-June, while in June alone the sales declined by 13 percent, to EUR 99.8 million. In Estonia, the sales of the grocer slid by 3.9 percent, to 183.3 million EUR, and in Latvia - by 6.5 percent, to EUR 291.8 million in the first half of the year. In June alone, Estonian sales went down by 10.4 percent, to EUR 31.4 million, and in Latvia the sales plunged by 14.4 percent, to EUR 48.8 million, year-on-year.
Tuesday, 7th of July
Sugar import grows
Import of white sugar in Lithuania increased by 19.42 percent this April comparing it with March, the informational system of Agriculture and Food Products Market reports. The greatest amount of sugar is imported from Poland to Lithuania, about 55 percent of the entire imported amount of sugar. It is said that 8,038 tons of white sugar were imported in Lithuania in April.
Imposed a fine
The Board of the Bank of Lithuania imposed LTL 6,300 fine on Panevezio Kredito Unija (Panevezys Credit Union) for violations that had been revealed during an inspection of the central bank. The bank says that the credit union violated the rules on making transaction agreements and special previsions on doubtful property.
Customer migration out of Omnitel is diminishing second month in a row. In June Omnitel lost 5,404 subscribers, 20 percent less than in May and 3 times less than in April. Meanwhile the position of Bite began to decline: the operator lost more customers than gained. According to data provided by Mano Numeris, Omnitel succeeded in suppressing the migration wave caused by introduction of Personal plans. Omnitel also gained 3,696 new subscribers in June. Tele2 remained the only operator, which gained more customers than lost: 4,185 customers transferred their numbers to Tele2 while only 1,389 left the operator.
Monday, 6th of July
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