IMF executive board concludes 2013 article IV consultation with Republic of Lithuania

28 March 2013

Since the 2008-09 crisis, significant progress has been made in reducing macro-economic imbalances, and the economic recovery is well underway.

Growth registered 3½ per cent in 2012, supported by strong exports and a bumper harvest. Private consumption was also robust, reflecting rising consumer confidence and improving labor market conditions. Unemployment fell to 13.2 percent and has been on a declining trend for both youth and the long-term unemployed. Inflation slowed to 3.2 per cent in 2012 as the effects of rising global commodity prices moderated.

The fiscal deficit narrowed from 9½ per cent of GDP in 2009 to 5½ per cent of GDP in 2011, and to an estimated 3 per cent of GDP in 2012.

The largely foreign-owned banking system, overall, remained well capitalised, liquid, and profitable.

Executive Board Assessment [abridged]

• Executive Directors welcomed the ongoing recovery and the impressive macro-economic rebalancing since the 2008–09 crisis.
• They noted that the 2013 budget balances the need to support the recovery with further consolidation. Looking ahead, Directors agreed that further reductions in the structural fiscal deficit will be needed to rebuild buffers.
• Directors commended the authorities for the intervention in four insolvent credit institutions which has strengthened the overall soundness of the financial system.
• Directors stressed that maintaining competitiveness, addressing labour market inefficiencies, and enhancing the business and investment environment will be key to sustain growth and reduce unemployment over the medium term.

Full article

Republic of Lithuania: Selected Issues

Republic of Lithuania: 2013 Article IV Consultation - Staff Report

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