Direct investment in Q4 2022

The Bank of Lithuania and the State Data Agency published the provisional data on direct investment (DI) for Q4 2022. According to the latest data release:

the flow of foreign direct investment (FDI) in Lithuania amounted to €449.7 million in Q4 2022, which was driven by the growth in reinvestments (€622.3 million). During the period under review, the largest increase in investment was observed for the UK (€302.7 million), Swedish (€124.8 million) and Latvian (€119.3 million) capital companies, whereas the sharpest decline was recorded for Polish (€204.7 million) capital companies. In terms of economic activity, investments in manufacturing (€231.4 million) as well as financial and insurance activities (€142.1 million) were the ones to stand out.

Over the course of 2022, the flow of FDI amounted to €2 billion and, compared with 2021, fell by 15.5% owning to a plunge in reinvestments, which had failed to offset the growth in debt instruments;

FDI income by non-residents amounted to €745.7 million in Q4 2022 and was 3% lower year on year. The bulk of income was reinvested (€622.3 million). The largest share of FDI income was earned by Swedish (€162.9 million) and the UK (€132.8 million) investors. Over 2022, FDI income increased by 5.9% to €3 billion;

cumulative FDI in Lithuania grew by 9.7% over the year and amounted to €29.7 billion, or 44.4% of GDP, as at 31 December 2022. By comparison, accumulated FDI in Latvia amounted to €22.6 billion and to €32.8 billion in Estonia. FDI per capita in Lithuania amounted to an average of €10,397 (as at 31 December 2021 – to €9,661). Compared with FDI per capita in Latvia, Lithuania is not far behind, but there is a significant gap in comparison to Estonia (see Chart 1). At the end of Q4 2022, the largest investors in Lithuania included Germany (€5.6 billion), Sweden (€3.2 billion), Estonia (€3.1 billion), the Netherlands (€2.5 billion) and the UK (€2 billion). The largest share of investments (34.7%) was attracted by companies engaged in financial and insurance activities;

the flow of Lithuania’s DI abroad was positive in Q4 2022 and amounted to €49.6 million. The largest investment flows were recorded for Poland (€57.2 million). In terms of economic activity, the largest investments were directed to enterprises in administrative and support service activities (€28.1 million), wholesale and retail trade as well as repair of motor vehicles and motorcycles (€17.1 million);

DI income earned by Lithuanian investors abroad in Q4 2022 amounted to €53.5 million. The majority of these (€35.2 million) were reinvested earnings. The largest share of income was earned from investments in Latvia (€47.7 million), and, in terms of economic activity, from undertakings in electricity, gas, steam supply and air conditioning (€14.7 million) as well as information and communication activities (€12 million). Investment income received from companies engaged in wholesale and retail trade as well as repair of motor vehicles and motorcycles decreased by 85.4% (see Chart 2). Throughout the year, Lithuania’s DI income abroad amounted to €177.8 million;

Lithuania’s cumulative DI abroad grew by 4.4% over the year and stood at €10.6 billion as at 31 December 2022. Lithuania’s DI in EU Member States accounted for 53.7%, in euro area countries – for 43.6%, whereas in the US – for 40.4% of Lithuania’s total DI abroad. The largest share of Lithuania’s cumulative DI abroad (49.4% or €5.2 billion) went to companies engaged in professional, scientific and technical activities.

Chart 1. FDI per capita

Chart 2. Lithuania’s DI income abroad

When calculating the data for Q4 2022, the data for Q4 2020-Q3 2022 was revised. Detailed data on DI is available on the Bank of Lithuania website under External statistics.

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Statistics, External Sector Statistical Releases, foreign direct investment