A failure to compensate the losses suffered by the dairy and meat sectors due to Russia’s restrictions on the imports of food and farm products may shave more than 0.2 percentage points off the Lithuanian GDP growth, Agriculture Minister has said.
Virginija Baltraitienė
© DELFI / Tomas Vinickas

“[The initial estimates] are probably based on what we see, how much they lose, what are the losses of our companies if we don’t compensate immediately. We see how much the dairy sector, the meat sector lose due to those former export markets, the Russian market. If we wait longer, if we don’t address those issues, naturally, the growth may be even smaller,” Virginija Baltraitienė said in an interview to the Žinių Radijas radio station on Tuesday.

The Finance Ministry had estimated that the growth of Lithuania’s GDP might slow down by 0.2 percentage points due to Russia’s sanctions, she said.

“If we don’t act, if we don’t guarantee that production, if there are no new markets, then, of course, the figures might be larger,” Baltraitienė noted.

Last week, Moscow announced a one-year embargo on meat, vegetable and fruit, milk and milk product imports from the EU, US and some other countries supporting sanctions against Russia over its policies in Ukraine.

Retailers must chip in too

If the Lithuanian government decided to cut (VAT) rates for food producers, major retailers would have to commit as well to reduce prices for consumers, says Agriculture Minister Virginija Baltraitiene.

In her words, meat producers and vegetable growers are asking the government to cut the VAT as they say there are a lot of imported unaccounted production in Lithuanian markets and they find it hard to compete with it.

"If politicians decided to cut the VAT, there should be a memorandum signed with Lithuania's major retailers (…) that prices must also be reduced. If prices do not go down at shopping centres, then there's no point in cutting the VAT," the minister told the Žinių Radijas.

A VAT rate of 21 percent applies to meat and vegetables since 2009.

BNS
Leave a comment
or for anonymous commenting click here
By posting, you agree to terms
Read comments Read comments

Lithuania's budget gets EUR 4 mln of "nobody's money" after FNTT probes

4 million euros, officially recognized as having no owner, have been transferred to the state budget...

Lithuanian govt hopes papal visit will encourage religious tourism

Lithuania's government hopes the upcoming papal visit will encourage religious tourism in the country...

Lithuania ahead of Latvia, Poland, but behind Estonia on social progress index

The social environment in Lithuania is better than in Latvia and Poland, but worse than in Estonia,...

PM to invite European retailers to invest in Lithuania

Lithuanian Prime Minister Saulius Skvernelis says he plans to invite 12 European major retail chains...

Akmenė awaiting ground-shaking investment

Lithuania's northern district of Akmenė barely lags behind other cities in Šiauliai County in terms...