No-deal Brexit no longer a major threat to Lithuania, economists say

  • 2020-09-07
  • BNS/TBT Staff

VILNIUS – A no-deal Brexit is no longer a major threat to the Lithuanian economy, economists said on Monday.   

Lithuania is now facing more serious threats due to other problems, primarily the coronavirus pandemic which has not caused any major domestic economic downturn, but has affected its key export markets, they said. 

"Brexit is definitely not at the top of the agenda, because there are more serious issues," Indre Genyte-Pikciene, the chief economist at INVL Asset Management, told BNS. 

Although the Lithuanian economy is very open and dependent on exports, its foreign trade dependence on the UK is not very high, she noted 

SEB Lithuania's economist Tadas Povilauskas said fears remain the same as far as the UK's withdrawal from the EU goes, but it has been more than four years since the referendum, and Brexit, even without a deal with the EU, will no longer be a shock to the Lithuanian economy. 

Most Lithuanian companies have done their homework to prepare for all possible scenarios, he noted. 

A no-deal Brexit is currently seen by SEB economists as a "fifty-fifty" probability, according to Povilauskas.

British Prime Minister Boris Johnson last weekend threatened to quit Brexit talks with the EU if no trade agreement is reached by the bloc's summit scheduled for October 15. 

The UK accounted for 5.2 percent of the total exports of Lithuanian-origin goods in 2019, down from 6.1 percent in 2016, the year of the Brexit vote, according to Statistics Lithuania. 

Figures from the Bank of Lithuania show that the share of Lithuanian services exports to the UK is even lower, at around 4 percent.