Lithuanias infrastructure sector has suffered severely from the knock-on effects of the countrys financial situation. The countrys budget deficit has spiked, leaving little money in the pot for infrastructure spending. Years of fiscal austerity by the Lithuanian government wiped out 5.2% of government expenditure between 2008 and 2010 in real terms. With the government now looking to stick to its austerity agenda, in which spending is set to be cut by 4%, recovery in the infrastructure segment is likely to be very slow.

However, Lithuania will still receive funds from the EU, which is focusing its energy independence investments and regional transport integration investments in the Baltic region. Investment into the power sector continues to be a necessity, as the decommissioning of the Ignalina NPP draws to a close. This has cushioned the blow to this sector, especially with the help of EU funds for power interconnectors.

Lithuania has historically been energy independent and a net power exporter, providing a secure business environment based on access to electricity; however, this status has been under threat since 2009. Furthermore, if Lithuania resorts to its worst-case scenario of reliance on Russian power imports, prices will be pushed up. Consequently, the sector has seen a flurry of activity as the country grapples with stemming an energy shortfall. Renewables - wind power in particular - has been a notable emerging subsector, as the EU puts pressure on Lithuania to achieve ambitious targets and private investors have been welcomed.

The transport sector, which is currently sufficient for the countrys needs, is set for further investment over the mid-term. As a key transport corridor, investments into road and rail projects will improve the transportation of both goods and people through and to the country. While the economic slowdown presents downside risks to planned domestic investments, the EU-led projects which serve to integrate the region will be supported through the EUs Trans-European Transport Network funds.

The construction sector has been active across the residential, commercial and industrial segments. The industry is open to private investment and key players in the sector have mostly been regional and domestic companies. However, the sector has experienced a severe downturn, and its recovery is likely to be prolonged.