
Economic Overview
As a member of the EU since 2004, Lithuania has experienced significant growth coupled with the rapid modernization 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 fueled 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. After two years of stagnation, Lithuania's GDP grew by 2.6% in 2024. Economic recovery has been mainly driven by private consumption, fueled by strong wage growth and low inflation, which offset weak private investment. Despite external uncertainties, the external sector also contributed positively, particularly through robust services exports. Private consumption growth is expected to accelerate in 2025 and, to a lesser extent, in 2026, driven by continued real wage growth. Investment in intangibles, defence, and energy is projected to increase starting in 2025, supported by EU funding and monetary policy easing. While export growth will largely depend on the EU recovery, imports are anticipated to outpace exports. Overall growth is forecast at 2.6% this year and 2.4% in 2026 (IMF).
Macroeconomic indicators are generally positive, having recorded budget surpluses before the pandemic. Nevertheless, the budget turned negative since then: in 2024, the general government deficit rose significantly to 2% of GDP, up from 0.7% in 2023, due to higher social spending, interest payments, public wages, and capital transfers for national defence. In 2025, the deficit is projected to increase further to 2.4% of GDP, driven by a 0.7 percentage point rise in government expenditure, while revenue grows at a slower pace. The main factor is a 0.6 percentage point increase in social benefits, including pensions, largely due to pension indexation and a 26% rise in the minimum consumption basket. Public debt reached 38.3% of GDP in 2024, with the debt-to-GDP ratio rising to 41.0% in 2025 and 44.6% in 2026, mainly due to the growing deficit and necessary stock-flow adjustments (data EU Commission). Inflation in Lithuania is expected to rise in 2025, partly due to higher indirect taxes, before stabilizing above 2%. After hitting a low of 0.1% in October 2024, headline inflation rose to 1.9% by year-end. Core inflation remained high, driven by strong service price growth and high wages, despite lower prices for food and industrial goods. While inflation fell below the eurozone average in 2024, high past inflation and wage growth highlight the need for productivity growth to maintain competitiveness.
The continued inflow of people fleeing the war in Ukraine and entering the labour market eased labour demand pressures in 2024. However, with not all new entrants finding employment, the unemployment rate was projected to rise from 6.9% in 2023 to 7.5% in 2024. In 2025, slower arrivals of displaced persons, along with natural population decline, are expected to reduce the unemployment rate to 7.0%, and further to 6.9% in 2026 (EU Commission). The IMF estimated the country’s GDP per capita (PPP) at USD 53,623 in 2024, slightly below the EU average; however, according to the latest figures released by the EU Commission, around 6.5% of the population is living below the absolute poverty line, with 20.9% being at risk of poverty.
Main Indicators | 2023 (E) | 2024 (E) | 2025 (E) | 2026 (E) | 2027 (E) |
GDP (billions USD) | 77.84 | 82.79 | 87.98 | 92.90 | 97.19 |
GDP (Constant Prices, Annual % Change) | -0.3 | 2.4 | 2.6 | 2.4 | 2.2 |
GDP per Capita (USD) | 26,998 | 28,713 | 30,514 | 32,218 | 33,978 |
General Government Balance (in % of GDP) | -0.5 | -1.3 | -1.3 | -1.3 | -1.4 |
General Government Gross Debt (in % of GDP) | 38.3 | 38.1 | 37.9 | 37.6 | 37.4 |
Inflation Rate (%) | 8.7 | 0.9 | 2.4 | 2.6 | 2.4 |
Unemployment Rate (% of the Labour Force) | 6.9 | 7.3 | 7.1 | 6.5 | 6.1 |
Current Account (billions USD) | 1.51 | 2.33 | 2.55 | 2.67 | 2.73 |
Current Account (in % of GDP) | 1.9 | 2.8 | 2.9 | 2.9 | 2.8 |
Source: IMF – World Economic Outlook Database , October 2021
Country Risk
See the country risk analysis provided by La Coface.
