The economy of Lithuania is the largest economy among the three Baltic states. Lithuania is a member of the European Union and its GDP per capita is the highest in the Baltic states.
Lithuania belongs to the group of very high human development countries and is a member of WTO and OECD.
In the 1990s, Lithuania rapidly moved from a centrally planned economy to a market economy, implementing numerous liberal reforms. It enjoyed high growth rates after joining the European Union along with the other Baltic states, leading to the notion of a Baltic Tiger. Lithuania’s economy (GDP) grew more than 500 percent since regaining independence in 1990. The Baltic states have a combined workforce of 3.3 million people, and 1.4 million of these working people live in Lithuania.
Lithuania has a sound fiscal position. The 2017 budget resulted in a 0.5% surplus; the gross debt was stabilizing at around 40% of the GDP. The budget remained positive in 2017 and was expected to continue to do so in 2018.
On average, more than 95% of all foreign direct investment in Lithuania comes from European Union countries. Sweden is historically the largest investor with 20% – 30% of all FDI in Lithuania. Foreign Direct Investment into Lithuania spiked in 2017, reaching its highest ever recorded number of greenfield investment projects. In 2017, Lithuania was the third country, after the Republic of Ireland and Singapore by the average job value of investment projects.
Lithuania is ranked 11th in the world in the Ease of Doing Business Index prepared by the World Bank Group, 16th out of 178 countries in the Index of Economic Freedom, measured by The Heritage Foundation and 8th out of 165 countries in the Economic Freedom of the World 2021 by Fraser Institute.
Lithuania is among the top 5 countries in the world by postsecondary (tertiary) education attainment. This educated workforce attracted investments, especially in the ICT sector in the last few years. The Lithuanian government and the Bank of Lithuania simplified procedures for obtaining licenses for the activities of e-money and payment institutions positioning the country as one of the most attractive for the financial technology initiatives in the EU.
SMEs account for 99.6% of all enterprises operating in Lithuania, the majority of them (81.9%) being micro-enterprises. Most SMEs (80.4%) operate as a private limited liability company and are primarily engaged in wholesale or retail trade activities (almost a third of all SMEs).
SMEs play an important role in Lithuania’s non-financial business economy. In 2018, they generated 69.4% of the economy’s value added and 75.9% of employment, exceeding the respective EU averages of 56.4% and 66.6%. On average, SMEs in Lithuania occupy around 3.8 people, close to the EU average of 3.9.
Average SME productivity (calculated as value added per person employed) was approximately €18,500 in the reference period, less than half the EU average of €44,600. Although it has caught up impressively over the past two decades, the fact that productivity is still below the EU average reflects remaining barriers to investment, skills mismatches, relatively low firm dynamics and a large informal sector.
Lithuania (The Republic of Lithuania)
Eastern European Time (GMT+3)
1 January to 31 December (calendar year)
National Minimum Wage:
€730 per month
Taxpayer Identification Numbers:
Tax Identification Number (VMI – Personal)
Main trading partners:
Russia, Latvia, Germany, Poland, Netherlands, United States, Estonia, Sweden, United Kingdom, & Ukraine.