Lithuania Net Export

Lithuania Net export.

Introduce main indicators of Lithuania that may have impact on Net exports.

Use macroeconomic model to see the consequences in Lithuania economy.

In 2 example you can see Lithuania NET export, wich indicates current account deficit in 2009-2014 period. It represents Lithuania import and export amount. In X asis you can see period of years from 2009 to 2014, while in the Y asis there is negative NET export in billions of Euros. The amplitute of fluctuation in NET export is -3.49 billions of Euros it means that the lowest amount of export comperable with import was at 2013 (€-6.63 B) , while the best year for export was at 2010 only €-3,1 B deficit. We noticed that every year import and export grow by big differences. There was small stagnation from 2009 to 2010, but after this year it is constantly gowing up. The main reasons for Current account deficit include: Overvalued exchange rate Uncompetitive export sector, high consumer spending sucking in imports.

One of the indicators we want to overlook in our project is government consalidated gross debt in millions of euros. It is not directly linked with current accont deficit, which is one of the problems in current Lithuania economy, but it has an indirect effect because Budged Debt creates increased Aggregate Demand (futher – AD), which makes consumer spend more on imports. But, however, there is and an opposite point of view, because you can have a Budget Debt without creating a current account deficit, one of the greatest example of this is Japan. So, whereas, government consalidated gross debt is one of the AD components, as well as Net Exports, we can try to look its influence on Lithuania economy and to it‘s AD function impact to IS-LM model.

In 3 example you can see Lithuania Government consalidated gross debt in millions of Euros during 2009-2014 period. It represents Lithuania collected amount from this tax. In X asis you can see period of years from 2009 to 2014, while in the Y asis there is Government consalidated gross debt in millions of Euros. The amplitute of fluctuation is 7011,5 millions of Euros, it means that the lowest Budget Debt was at 2009 (7814,8 MEUR), while the highest Debt was at 2014 (1482,3 MEUR). Analyzing the chart is clear to see that Government Debt is constantly growing and from 2009 to 2014 it amount is almost twice greater. It shows that Lithuania a government spends more than it collects in taxes and it is still growing problem (Ball, Mankiw). Hovewer, in 2014 debt may seems bigger because goverment rise its borrowing in advance, as a result of introducing Euro. In the second half of the year it was released bonds emision of 1 mlrd. Euros, and biggest amount of borrowed money in the beggining of 2015 were spend for earlier reliesed obligation emission.Also we made a linear trend line, which represents that the multiplier is possitive, so it means that it is tend to grow during the following year.