World Economy

Investors Confident About Lithuanian Economy

Investors Confident About Lithuanian EconomyInvestors Confident About Lithuanian Economy

Investors’ Confidence Index for Lithuania (ICIL) – a quarterly research conducted by the association “Investors’ Forum” – revealed that in the nearest future, four out of 10 investors are planning to increase capital investments, almost as many (38%) expect to launch new investment projects and create new workplaces.

However, entrepreneurs are more pessimistic about demand growth – only one out of four investors believes it will increase, Delfi reported.

In the second quarter of 2015 ICIL value has reached 1.174 points out of possible 2 and almost caught up with the highest value in its history recorded at the end of 2014.

Association Investors’ Forum links increased investors’ confidence in the  Lithuanian economy with a smooth process of euro adoption which, according to the experts, has ended a period of economic uncertainty. Traditionally, such factors as transport, logistics, telecommunications and IT infrastructure had the greatest impact on the favorable investors’ outlook on the Lithuanian economy.

Moreover, participants of the latest survey were more optimistic about business transparency – 7% of respondents expressed expectations it will increase in the nearest future and none expected that Lithuanian business environment will become less transparent.

 Business Environment

Association “Investors’ Forum” measured Investors’ Confidence Index by surveying 42 foreign capital companies operating in Lithuania and evaluating Lithuania’s business environment, investment plans of the companies and factors affecting investment activities.

“At the beginning of the year optimism replaced skepticism. Foreign capital companies showed positive perception of Lithuanian economic perspectives and revealed plans to increase investments which is an excellent signal for potential investors.

However, entrepreneurs noticed some barriers as well, such as lack of skilled labor – Lithuania remains a country of cheap but not of skilled labor. In order to sustain our economic competitiveness this problem must be solved as soon as possible”, – commented Rolandas Valiunas, Investors’ Forum Chairman of the Board.

Forty percent of participants noted that there are not enough skilled employees in Lithuania and eventually it may affect the  country’s economy. Yet another worrying factor detected by the latest survey was the relatively modest companies’ performance indicators. This time entrepreneurs assessed potential to increase profitability of their companies more carefully.