Lithuania’s economic trajectory in the shadow of the Ukraine conflict
DOI: https://doi.org/10.3846/mla.2025.23389Abstract
The ongoing situation between Russia and Ukraine has sent shockwaves through Europe, impacting the economies of nearby nations like Lithuania. Lithuania, a member of the European Union, finds itself in a complicated position due to its historical and political connections to Russia and Ukraine. Using such methodology as literature review, correlation, and regression analysis, structural equation modelling this research dives into how war is affecting Lithuania’s economy, including changes in trade, energy security, and relocation of investments. Because of the sanctions against Russia, an important trading partner for Lithuania, their usual trade routes have been thrown off. This has forced Lithuania to look for new markets and other places to get energy. At the same time, Lithuania has had to spend more on its military and faces greater uncertainty because of the conflict, which has changed fiscal policies and investor confidence. The conflict has also sped up Lithuania’s move towards Western markets and strengthened its employment market. This paper takes a deep dive into Lithuania’s economic journey within the changing landscape of security, economic indicators, and policy reactions. The results emphasize both the weaknesses and strengths of Lithuania’s economy in the face of ongoing geopolitical conflict.
Article in English.
Lietuvos ekonominė trajektorija Ukrainos konflikto šešėlyje
Santrauka
Šiuo metu vykstanti situacija tarp Rusijos ir Ukrainos sukėlė didelį atgarsį Europoje, paveikdama ir netoliese esančių šalių, tokių kaip Lietuva, ekonomikas. Lietuva, kaip Europos Sąjungos narė, atsidūrė sudėtingoje padėtyje dėl savo istorinių ir politinių ryšių su Rusija ir Ukraina. Taikant tokius metodus kaip literatūros apžvalga, koreliacijos ir regresinė analizė, struktūrinių lygčių modeliavimas, šiame tyrime gilinamasi į tai, kaip karas veikia Lietuvos ekonomiką – įskaitant prekybos pokyčius, energetinį saugumą ir investicijų perskirstymą. Dėl sankcijų Rusijai, kuri yra svarbi Lietuvos prekybos partnerė, buvo sutrikdyti įprasti prekybos keliai. Tai privertė Lietuvą ieškoti naujų rinkų ir alternatyvių energijos šaltinių. Tuo pačiu metu Lietuva buvo priversta didinti karines išlaidas ir susiduria su didesniu neapibrėžtumu dėl konflikto, kuris paveikė fiskalinę politiką bei investuotojų pasitikėjimą. Konfliktas taip pat paspartino Lietuvos orientaciją į Vakarų rinkas ir sustiprino darbo rinką. Šiame darbe nuodugniai nagrinėjama Lietuvos ekonominė kelionė kintančiame saugumo, ekonominių rodiklių ir politikos atsako kontekste. Rezultatai pabrėžia tiek Lietuvos ekonomikos silpnąsias, tiek stipriąsias puses nuolatinio geopolitinio konflikto akivaizdoje.
Reikšminiai žodžiai: geopolitinis konfliktas, ekonomikos augimas, karas, ekonominis stabilumas.
Keywords:
geopolitical conflict, economic growth, war, economic stabilityHow to Cite
Share
License
Copyright (c) 2025 The Author(s). Published by Vilnius Gediminas Technical University.
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
Chishti, M. Z., Khalid, A. A., & Sana, M. (2023). Conflict vs sustainability of global energy, agricultural and metal markets: A lesson from Ukraine-Russia war. Resources Policy, 84, Article 103775. https://doi.org/10.1016/j.resourpol.2023.103775> https://doi.org/10.1016/j.resourpol.2023.103775
Costa, A., Ng, T. S. S., & Foo, L. X. X. (2017). Complete mixed integer linear programming formulations for modularity density based clustering. Discrete Optimization, 25, 141–158. https://doi.org/10.1016/j.disopt.2017.03.002> https://doi.org/10.1016/j.disopt.2017.03.002
Ellis, E. (2021). The ethics of economic sanctions: Why just war theory is not the answer. Res Publica, 27(3), 409–426. https://doi.org/10.1007/s11158-020-09483-z> https://doi.org/10.1007/s11158-020-09483-z
Góes, C., & Bekkers, E. (2023). The impact of geopolitical conflicts on trade, growth, and innovation (Working Paper No. ERSD-2022-9). World Trade Organization, Geneva.
Guénette, J.-D., Kenworthy, P., & Wheeler, C. (2022). Implications of the war in Ukraine for the global economy. The World Bank Group. https://doi.org/10.1596/37372> https://doi.org/10.1596/37372
Hall, R. E., & Jones, C. I. (1999). Why do some countries produce so much more output per worker than others? The Quarterly Journal of Economics, 114(1), 83–116. https://doi.org/10.1162/003355399555954> https://doi.org/10.1162/003355399555954
Houle, C. (2019). Social mobility and political instability. Journal of Conflict Resolution, 63(1), 85–111. https://doi.org/10.1177/0022002717723434> https://doi.org/10.1177/0022002717723434
Irtyshcheva, I., Kramarenko, I., & Sirenko, I. (2022). The economy of war and postwar economic development: World and Ukrainian realities. Baltic Journal of Economic Studies, 8(2), 78–82. https://doi.org/10.30525/2256-0742/2022-8-2-78-82> https://doi.org/10.30525/2256-0742/2022-8-2-78-82
Izzeldin, M., Muradoğlu, Y. G., Pappas, V., Petropoulou, A., & Sivaprasad, S. (2023). The impact of the Russian-Ukrainian war on global financial markets. International Review of Financial Analysis, 87, Article 102598. https://doi.org/10.1016/j.irfa.2023.102598> https://doi.org/10.1016/j.irfa.2023.102598
Kersting, K., Mladenov, M., & Tokmakov, P. (2017). Relational linear programming. Artificial Intelligence, 244, 188–216. https://doi.org/10.1016/j.artint.2015.06.009> https://doi.org/10.1016/j.artint.2015.06.009
Khudaykulova, M., Yuanqiong, H., & Khudaykulov, A. (2022). Economic Consequences and Implications of the Ukraine-Russia war. The International Journal of Management Science and Business Administration, 8(4), 44–52. https://doi.org/10.18775/ijmsba.1849-5664-5419.2014.84.1005> https://doi.org/10.18775/ijmsba.1849-5664-5419.2014.84.1005
Kola Benson, A. (2023). Does the Russia-Ukraine war affects trade relations and foreign Direct investment flows from Europe into Asia and Africa? International Journal of Research in Business and Social Science (2147-4478), 12(2), 287–300. https://doi.org/10.20525/ijrbs.v12i2.2403> https://doi.org/10.20525/ijrbs.v12i2.2403
Martínez-García, M., Ramos-Carvajal, C., & Cámara, Á. (2023). Consequences of the energy measures derived from the war in Ukraine on the level of prices of EU countries. Resources Policy, 86, Article 104114. https://doi.org/10.1016/j.resourpol.2023.104114> https://doi.org/10.1016/j.resourpol.2023.104114
Özdamar, Ö., & Shahin, E. (2021). Consequences of economic sanctions: The state of the art and paths forward. International Studies Review, 23(4), 1646–1671. https://doi.org/10.1093/isr/viab029> https://doi.org/10.1093/isr/viab029
Saktiawan, B., Juan Suam Toro, M., & Saputro, N. (2022). The impact of the Russia-Ukrainian war on green energy financing in Europe. IOP Conference Series: Earth and Environmental Science, 1114(1), Article 012066. https://doi.org/10.1088/1755-1315/1114/1/012066> https://doi.org/10.1088/1755-1315/1114/1/012066
Wang, S., Xu, L., Yu, S., & Wang, S. (2023). Russia-Ukraine war perspective of natural resources extraction: A conflict with impact on sustainable development. Resources Policy, 85, Article 103689. https://doi.org/10.1016/j.resourpol.2023.103689> https://doi.org/10.1016/j.resourpol.2023.103689
Zykiene, I., Leskauskienė, A., Mičiulienė, I., & Daugėlienė, R. (2023). Driving growth and innovation: Exploring foreign direct investment in the manufacturing sector (the case of Lithuania). European Integration Studies, 1(17), 124–140. https://doi.org/10.5755/j01.eis.1.17.34264> https://doi.org/10.5755/j01.eis.1.17.34264
View article in other formats
CrossMark check
Published
Issue
Section
Copyright
Copyright (c) 2025 The Author(s). Published by Vilnius Gediminas Technical University.
License
This work is licensed under a Creative Commons Attribution 4.0 International License.