According to the newspaper, the impact of the Russian financial crisis was greater on Lithuania than most Central and Eastern European countries. Losses in the Lithuanian banking sector are slight, while losses sustained by separate banks are lower compared with Estonian and Latvian banks.
However, Lithuanian exporters sustained far higher losses. Exports to the East decreased by 20 to30 percent, making the Lithuanian government cut next year's economic growth prognosis from 7 percent to 5.5 percent, the Financial Times wrote. Companies employed in exports, trade and cargo transportation are threatened with bankruptcy.
The turmoil in Russia complicated the government's efforts to decrease the current account deficit, coming to an all-time-high of 13 percent in the first half of 1998 and likely to continue its upward path. Only big foreign currency reserves should protect Lithuania from a financial crisis, the report reveals.
The newspaper, however, attached no significant importance to the Russian crisis' impact on the Lithuanian economy. The daily reported that the government flatly rejected devaluing the litas. And while Lithuania's sales to Russia accounted for 20 percent of exports, another 30 percent of high-quality output was exported to the European Union.
The Financial Times reported the Russian crisis could speed some overdue industrial restructuring, which had been slow since 1991.
Unlike Latvia and Estonia, Lithuanian business services are more expensive but not as effective, the paper reported.
Financial services account for only 2.5 percent of GDP and trade on the financial market is sluggish.
Eighty percent of imported goods are checked at customs, whereas the figure is 5 percent in EU states. Bureaucracy and corruption, the paper says, prevail in Lithuania.