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2018 OECD Economic Surveys: Lithuania 2018

image of OECD Economic Surveys: Lithuania 2018

Since renewed independence in 1991 and transition from a centrally planned to a market economy, Lithuania has substantially raised well-being of its citizens. Thanks to a market-friendly environment the country grew faster than most OECD countries over the past ten years. The financial system is resilient, and fiscal positions stabilised after a long period of deficits and rising debt. Yet productivity has remained subdued due to stringent labour market regulations, informality and skills mismatch. Wage and income inequality are high, fuelling emigration. The population is ageing fast and declining, particularly because of emigration, putting pressure on the pension system. A wide-reaching labour market, unemployment benefits and pension reform entitled “new social model” implemented in 2017 is expected to reinvigorate inclusive growth, strengthen the social safety net and underpin the sustainability of public finances. However, catch-up and more inclusive growth will require raising productivity that still remains well below the OECD average, and has slowed down recently. And rapid ageing and high emigration shrink the labour force by 1% every year, requiring a comprehensive approach to address the economic consequences.

SPECIAL FEATURES: PRODUCTIVITY AND INCLUSIVENESS; AGEING TOGETHER

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Basic Statistics of Lithuania, 2017

This Survey was discussed at a meeting of the Economic and Development Review Committee on 5 March 2018. The draft was revised in the light of the discussions and given final approval as the agreed report of the whole Committee on 11 April 2018. The Survey is published on the responsibility of the Secretary-General of the OECD.The Secretariat’s draft report was prepared for the Committee by Hansjörg Blöchliger and Vassiliki Koutsogeorgopoulou under the supervision of Piritta Sorsa. Analytical and statistical research was provided by Demetrio Guzzardi and Hermes Morgavi and editorial assistance was provided by Carolina González. The previous Survey of Lithuania was issued in March 2016.

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