For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
As a member of the EU since 2004, Lithuania has experienced significant growth coupled with the rapid modernisation of its economy, becoming a member of the OECD in 2018. The country experienced the fastest recovery in Europe from the 2009 financial crisis, partly fuelled by a well-performing banking system and a diversified industrial sector; and it was one of the best-performing countries during the COVID-19 pandemic. Nevertheless, after growing 5% in 2021, economic growth in Lithuania slowed down in 2022 to 1.8%. This was mostly due to the adverse consequences of the Russian invasion of Ukraine, falling exports to some eastern European countries and contracting private consumption. Economic activity is forecast to decelerate further in 2023 (1.1% as per the IMF’s forecast) before edging up to 2.8% in 2024 driven by stronger private consumption expenditure and increased EU funds absorption.
Macroeconomic indicators are generally positive, having recorded budget surpluses before the pandemic. Nevertheless, the budget turned negative since then: in 2022, it was in deficit by 2.1% of GDP and in 2023 Fitch Ratings expects it to deteriorate to 4.3% amid higher expenditure measures, including packages to contain the effects of higher energy prices, spending on Ukrainian refugees, and investment in Lithuania's railway infrastructure as a result of the sanctions against Belarus. The 2023 budget also includes various more permanent measures, including wage increases in the public sector, in non-taxable income, in pensions, child benefits and other social benefits. The debt-to-GDP ratio decreased to 42.2% as strong nominal GDP growth outpaced nominal growth in debt by a large margin. The ratio is expected to follow a downward trend this year (39.5%) and the next (37.9% - IMF). Spiralling energy and food prices, as well as transportation services, contributed to a spike in the inflation rate, which averaged 17.6% in 2022. Strong wage dynamics have also contributed to an acceleration of core inflation. Weaker domestic and external activity, easing supply bottlenecks, and a gradual decline in global energy prices are expected to contribute to the declining dynamics of inflation, which is forecast at 8.4% and 3.2% in 2023 and 2024, respectively, by the IMF.
The unemployment rate increased marginally to 7.3% in 2022, from 7.1% one year earlier. Shortages of skilled labour, an increase in the minimum wage by 15% and strong public-sector wage growth should support continued wage growth in 2023, with the unemployment rate also decreasing to around 7%. The IMF estimated the country’s GDP per capita (PPP) at USD 46,159 in 2022; however, according to the latest figures released by Statistics Lithuania, around 24.5% of the population is at risk of poverty.
|Main Indicators||2020||2021||2022 (E)||2023 (E)||2024 (E)|
|GDP (billions USD)||56.80||66.49||70.52||78.35||85.05|
|GDP (Constant Prices, Annual % Change)||-0.0||6.0||1.9||-0.3||2.7|
|GDP per Capita (USD)||20,323||23,739||25,036||28,094||30,776|
|General Government Balance (in % of GDP)||-6.1||-1.4||-1.5||-4.5||-3.1|
|General Government Gross Debt (in % of GDP)||46.3||44.0||39.6||40.2||39.1|
|Inflation Rate (%)||1.1||4.6||18.9||10.5||5.8|
|Unemployment Rate (% of the Labour Force)||8.5||7.1||5.9||7.0||6.5|
|Current Account (billions USD)||4.15||0.93||-3.15||-2.38||-1.72|
|Current Account (in % of GDP)||7.3||1.4||-4.5||-3.0||-2.0|
Source: IMF – World Economic Outlook Database , Latest available data
Note: (e) Estimated Data
Agriculture contributes 3.3% to the GDP and employs 6% of the workforce (World Bank, latest data available). Lithuania's main agricultural products are wheat, wood, barley, potatoes, sugar beets, wine and meat (beef, mutton and pork). Arable land and permanent crops cover 2 million hectares, more than one-third of the country’s territory. According to preliminary figures from the national statistical office, in 2022 the gross agricultural production reached EUR 5 billion, up from EUR 3 billion one year earlier (such a sharp increase was mostly due to the increase in prices).
The industrial sector accounts for 25.3% of GDP, employing around 26% of the active population. The main industrial sectors are electronics, chemical products, machine tools, metal processing, construction material, household appliances, food processing, light industry (including textile), clothing and furniture. The country is also developing oil refineries and shipyards. The World Bank estimates that the manufacturing sector alone contributes to 16% of the country’s GDP. In 2022, industrial production in Lithuania totalled EUR 38.4 billion at current prices and, compared to the same period in 2021, increased by 9.4% at constant prices.
Lastly, the services sector contributes 60.7% to the GDP and employs more than two-thirds of the active population (68%). The information technology and communications sectors are the most important contributors to the GDP. In recent years, tourism has been one of the fastest-growing sectors of the country's economy. After contracting abruptly following the COVID-19 pandemic, the sector showed signs of recovery in the first half of 2022, when 456,000 foreign tourists visited the country: although still half of the pre-pandemic level, it was four times more than in the same period one year earlier. Moreover, domestic tourism surpassed the pre-pandemic year 2019. The Lithuanian banking sector consists of 18 banks, twelve of which hold a banking or specialized banking license, and six banks operate as branches of foreign banks (European Banking Federation).
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||6.4||25.7||67.9|
|Value Added (in % of GDP)||3.3||25.3||60.7|
|Value Added (Annual % Change)||-11.7||8.6||5.8|
Source: World Bank - Latest available data.
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|Euro (EUR) - Average Annual Exchange Rate For 1 MUR||0.03||0.03||0.02||0.03||0.02|
Source: World Bank - Latest available data.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Lithuania is a very open economy, with foreign trade representing 156% of GDP (World Bank, latest data available). According to Statistics Lithuania, in 2021 the country’s main exports were in the chemical and related industries (14.9%), machinery and electrical equipment (13.5%), and mineral products (10%). Lithuania mostly imported machinery and mechanical equipment (17.8%), mineral products (17.3%), and chemical and related products (12.2%).
Considered as a whole, the European Union is Lithuania’s major trading partner. In terms of single countries, in 2021 exports were mostly destined to Russia (10.8%), Latvia (9.3%), Germany (8.2%) and Poland (8%). The main origins of Lithuania’s imports were Germany (12.8%), Poland (12.1%), Russia (11.9%), Latvia (8%) and the Netherlands (5% - data Statistics Lithuania).
The country's merchandise trade balance has historically been in deficit, which can largely be explained by the energy imports and, particularly, by the large amount of gas Lithuania imports from Russia. In 2021, Lithuania exported goods worth EUR 40.8 billion, with imports amounting to EUR 44.5 billion. Compared to a year before, exports in 2021 increased by 24.6% and imports by 34.5%. However, the balance of services is generally positive: in 2021 exports stood at EUR 15.2 billion (+24.1%) as imports grew at a faster pace, to EUR 9 billion (+39.3% y-o-y – WTO). According to the national Department of Statistics, exports of goods of Lithuanian origin reached EUR 12.7 billion between January and June 2022 and increased by 31.1% compared to the corresponding period of 2021. Germany, Poland, and the U.S. were the leading export destinations.
|Foreign Trade Indicators||2017||2018||2019||2020||2021|
|Imports of Goods (million USD)||32,258||36,502||35,759||33,140||44,585|
|Exports of Goods (million USD)||29,901||33,337||33,151||32,767||40,828|
|Imports of Services (million USD)||5,871||7,050||7,692||6,504||9,061|
|Exports of Services (million USD)||9,408||11,330||13,191||12,253||15,214|
|Imports of Goods and Services (Annual % Change)||11.1||6.0||6.0||-4.5||19.9|
|Exports of Goods and Services (Annual % Change)||13.5||6.8||10.1||0.4||17.0|
|Imports of Goods and Services (in % of GDP)||71.3||73.4||72.0||63.9||76.0|
|Exports of Goods and Services (in % of GDP)||73.6||75.2||77.3||73.3||80.5|
|Trade Balance (million USD)||-2,307||-3,367||-2,634||-451||-3,414|
|Trade Balance (Including Service) (million USD)||1,130||959||2,904||5,307||3,020|
|Foreign Trade (in % of GDP)||144.9||148.6||149.3||137.2||156.5|
Source: WTO – World Trade Organisation ; World Bank , Latest Available Data
(% of Exports)
|See More Countries||58.3%|
(% of Imports)
|See More Countries||56.1%|
Source: Comtrade, Latest Available Data
|46.5 bn USD of products exported in 2022|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals||11.6%|
|Furniture and parts thereof, n.e.s. (excl. seats...Furniture and parts thereof, n.e.s. (excl. seats and medical, surgical, dental or veterinary furniture)||4.7%|
|Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons||3.1%|
|Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702)||2.4%|
|Wheat and meslinWheat and meslin||2.2%|
|See More Products||76.0%|
|55.1 bn USD of products imported in 2022|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude||11.1%|
|Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons||9.5%|
|Electrical energyElectrical energy||4.6%|
|Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702)||3.5%|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals||2.1%|
|See More Products||69.2%|
Source: Comtrade, Latest Available Data
To go further, check out our service Import Export Flows.
|2.0 bn USD of services exported in 2020|
|Personal travelPersonal travel||23.53%|
|Business travelBusiness travel||6.22%|
|Telecommunications servicesTelecommunications services||4.86%|
|Franchises and similar rightsFranchises and similar rights||0.04%|
|1.4 bn USD of services imported in 2020|
|Personal travelPersonal travel||31.35%|
|Business travelBusiness travel||7.22%|
|Information servicesInformation services||3.29%|
|Other information provision...Other information provision services||3.22%|
|News agency servicesNews agency services||0.07%|
|Telecommunications servicesTelecommunications services||7.17%|
|Construction in the compiling...Construction in the compiling economy||5.60%|
|Franchises and similar rightsFranchises and similar rights||1.14%|
|Freight insuranceFreight insurance||1.66%|
|Other direct insuranceOther direct insurance||0.58%|
|Life insurance and pension fundingLife insurance and pension funding||0.04%|
Source: United Nations Statistics Division, Latest Available Data
The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
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Latest Update: September 2023