“Despite the changing geopolitical and economic environment, Lithuania’s economy remains resilient and able to adapt to new challenges. For both 2025 and 2026, the forecast is close to 3% GDP growth, and inflation should remain within sustainable limits,” Vice-Minister of Finance Kristupas Vaitiekūnas stated.
The Vice-Minister emphasized that this growth is based on stronger internal and external demand, growing investment and a resilient labour market. However, he recalled that we need to be prepared for potential risks such as restrictions on international trade, geopolitical tensions and demographic challenges.
However, according to K. Vaitiekūnas, Lithuania has a number of opportunities: a faster easing of monetary policy, an increase in investment in security, the implementation of the European Green Deal projects, more favourable migration trends and the transition to sustainable energy, as well as the accelerating use of EU funds, can open up new growth prospects.
The OECD estimates that a sustained increase in real wages, a relatively resilient labour market with unemployment below the long-term average and rising consumer confidence should boost household consumption intensity, and investment should foster GDP growth (3.1% in 2025, and 2.8% in 2026, respectively).
The OECD Survey highlights that increased competition in retail energy markets, stronger domestic capital markets, higher spending on R&D, better digital skills and further improvements in public sector transparency would increase productivity in a wide range of areas.
“It is natural that the focus is currently on defence. A significant increase in defence spending, while preserving the sustainability of public finances, is therefore a major challenge. However, sustainable fiscal policy, social well-being of people, investment in security and strengthening public services are the main priorities of the 19th Government over the next four years, therefore I am pleased that the OECD recommendations have only confirmed our right direction,” Vice-Minister of Finance K. Vaitiekūnas stressed.
The Vice-Minister agreed with the OECD's conclusions that capital markets in Europe, including Lithuania, are still underdeveloped and many companies face difficulties in accessing sources of finance. This problem is not unique to Lithuania but exists across the EU, as most companies still rely on bank financing and alternative ways of raising capital are not sufficiently exploited.
“Lithuania is making great efforts at both national and regional level to develop the capital market. In order to address these challenges, the Lithuanian Government has approved the Capital Market Development Guidelines for 2023-2025. In addition, the Baltic States are closely cooperating on the creation of a common PanBaltic capital market. The aim of this initiative is to strengthen the regional integration of capital markets, increase their attractiveness to investors and make it easier for companies to attract financing,” the Vice-Ministersaid.
The survey also states that ensuring sufficient funding for investments in renewable energy and reducing transport emissions are key to achieving emission reduction targets and increasing energy security. To this end, it is necessary to encourage private investment by maintaining a sufficient pipeline of long-term projects for private investors.
In addition, it is forecasted that faster growth of Lithuania's main trading partners will ensure a gradual improvement of exports. Of course, economic activity in the euro area, together with global commodity prices and geopolitical tensions, are the main risks to the positive outlook.
A special chapter of the 2025 Survey is dedicated to demographic challenges in Lithuania, which states that due to the expected severe demographic shock, there is a need to ensure the immigration of workers of all qualifications, to promote return migration and employment of older workers, to increase the use of private pension schemes and to improve the healthcare system in a cost-effective manner by further rationalising the hospital network and promoting healthier lifestyles in various forms.
Additional information:
The OECD's biennial economic survey aims to identify the impact of sectoral policies on the country's long-term growth and macroeconomic situation. The recommendations provided by OECD experts help to identify problems in the country and ways to solve them.
The OECD is an international organisation of 38 countries, founded in 1961 when the United States and Canada joined the Organisation for European Economic Cooperation (OECD), which united European countries for the common goal of rebuilding the economy destroyed after World War II. The headquarters of the organization is located in Paris. Lithuania became a member of this organization in 2018.
The organization offers its members and partner countries expert support based on the organization's values, implementing good global practices and standards in the areas of macroeconomics, environment, education, science, technology, innovation.
