There are about 73,000 Ukrainians in Lithuania. The Bank of Lithuania estimates that refugees from Ukraine could have created €400 million in added value in 2022. This is about 1% of the country’s gross domestic product. How have these results been achieved, and how might a possible mass exodus of Ukrainians to their home country affect the Lithuanian economy? Anzhelika Chekhovska is writing at the tv3.lt news portal.
Alena came to Vilnius from Odesa. Before the war, she had been selling wood for 9 years. After coming to Lithuania, she decided to start her own business.
“After several unsuccessful sushi orders in Lithuania, we realised that we could make rolls at home that we liked and could enjoy. So we decided to set up our own business and make our customers happy in Vilnius,” says Alena Podolina, owner of the sushi bar.
The sushi bar will be only 3 months old in April.
“In February, we almost reached break-even, and in March, we made our first profit,” says Alena.
The restaurant’s regulars include many Vilnius residents.
“I discovered this establishment completely by chance because I like to read when I pass by, and I’m especially interested in the changes that are happening in our city. So, as I travel every other day to work, I saw the sign for ‘sushi’, and out of curiosity, I went in because I realised that there would be something connected to Ukraine,” says Jolanta.
According to the latest data from the Migration Department, about 73,000 Ukrainian refugees are in Lithuania. The new workforce has had a positive impact on the Lithuanian economy.
“The war refugees from Ukraine have helped to ease some of the tensions in the labour market, but despite this, we have very low unemployment, rising employment and wages that are growing rapidly, in double digits,” says Gediminas Šimkus, Chairman of the Board of the Bank of Lithuania.
The Ukrainians entered the Lithuanian labour market at the right time – when there was a severe labour shortage.
“Based on where Ukrainians were employed, in what sectors, and assuming that their productivity is similar to that of other workers in the Lithuanian economy, we estimate that their contribution to value added in Lithuania could have reached up to €400 million. This means that Ukrainians could have contributed up to 1% of GDP,” explains Vaiva Šečkutė of the Bank of Lithuania.
According to the Bank of Lithuania, no negative impact on the Lithuanian economy should be expected if the Ukrainians return home at the war’s end. This should not be a cause for concern.
“First of all, the tension in the labour market is easing, so even if some Ukrainians leave, it is expected that companies will find it a little easier to find the missing workers in the current economic environment,” says Šečkutė.
The Bank of Lithuania also refers to foreign examples. Migration studies show that not all refugees take the opportunity to return home, even after the end of the war.
“I really do not think that a situation where war refugees from Ukraine would leave our country now would be possible any time soon. Having said that, even before the war, let’s remember that the transport sector was largely staffed by people from third countries, including Ukraine,” says Šimkus.
But other economists are not so optimistic. They believe that if Ukrainians were to return to their homeland, Lithuanian business would shake.
“It would be a minus for Lithuanian companies. That’s a fact. If Ukrainian refugees return to Ukraine, Lithuanian companies will automatically face a shortage of workers. This affects the competitiveness of Lithuanian companies, as they will increasingly increase wages and will have to look for some options to increase efficiency,” says economist Alexander Izgorodin.
Lithuania has no plans to take any additional measures to keep refugees in the country.
“Additional measures have been taken to facilitate the recruitment and integration of Ukrainian war refugees into the labour market. I do not think any additional measures should be taken, especially since, as we can see, the integration has been effective and successful”, Šimkus said.
23,000 refugees are working in Lithuania. 4,000 are registered as unemployed.
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