Most Lithuanian companies think geopolitical tensions will not affect business

“The least influence of the geopolitical conflict on businesses was seen by the construction sector, which is oriented towards the domestic market. Slightly more risks related to this are envisaged by service and industrial enterprises, while retailers are most concerned about the effect of the tensions in the East on business,” says Darius Kulikauskas, head of the Macroprudential Division of the Bank of Lithuania’s Financial Stability Department. According to the survey, 59.5 percent of the country’s enterprises, participating in the study, do not see any impact on their businesses from the conflict in Ukraine. More than a fifth (21.8 percent) of surveyed heads and financiers of enterprises indicated that the profitability of the enterprises represented by them could decrease, but the discharge of debt liabilities will not deteriorate as a result. Slight difficulties in fulfilling liabilities were noted by 9 percent of enterprises, while 3.4 percent of the survey’s participants indicated serious threats to their businesses and great difficulty in fulfilling liabilities.

Among the construction sector’s enterprise heads and financiers, more than three thirds (76.1 percent) of those surveyed do not project a negative impact on their businesses; out of the service sector enterprises, 61.1 percent claimed the same, industrial enterprises – 58.9 percent, distribution enterprises – 45.9 percent.

Among retailers, the most severe consequences to their businesses were envisaged by 5.7 percent, in the services sector – 3.0 percent, in industry and construction – respectively 2.4 and 2.3 percent of enterprise heads and financiers.

According to the survey’s data, the heads of small enterprises (up to 9 employees), claiming that their business will not be affected, amounted to 60.5 percent, medium-sized enterprise (10-50 employees) heads – 61.1 percent, and of large enterprises (more than 50 employees) – 56.6 percent.

6.6 percent of heads of small, 1.7 percent of medium and 1.9 percent of large enterprises indicated that the conflict could be a threat to business and make it significantly difficult to repay debts.