Lithuania is converging rapidly

Poverty is high

Regional inequality is rising

Competitiveness is declining

State-owned enterprises proliferate

School outcomes are weak

Control of corruption remains below OECD average

Lithuania is converging rapidly, and migration flows have turned positive

High inequality drives low well-being

The pandemic had a relatively mild impact on the economy

The labour market was strong before the crisis

Wages grew fast in recent years

External positions appear sound

The export structure has changed little over the past decade

Credit and housing indicators were robust before the crisis

Performance indicators suggest that the financial system is resilient

Fiscal policy was pro-cyclical until recently

Debt would rise to unsustainable levels if growth slows and deficits remain high

Public investment is relatively low

Pension adequacy could improve

Lithuania’s regulatory environment is open and business-friendly

State-owned enterprises weave through the economy

After thorough reform, Lithuania boasts an effective insolvency framework

Education performance is weak, although the system is well endowed with teachers

Innovation performance can be strengthened further

Some perceive corruption to be considerable

Lithuania needs to become greener

Poverty rates remain high

A large share of population is at risk of poverty and the poverty gap remains large

Some groups face especially high rates of poverty

The unemployed and low-educated are at high risk of poverty

Elderly women are affected most by poverty, explaining much of the gender gap

People with disabilities are vulnerable to poverty

Child poverty varies with the household type

Poverty rates vary according to region and, to a lesser extent, immigrant status

Many households experience severe material deprivation and energy poverty

The tax-transfer system could be more effective in reducing poverty

Social spending is low by international standards

Cash benefits can be strengthened further

The pension system is very redistributive but net replacement rates are low

Access to health care can improve

Social housing stock remains low and many households face poor housing conditions

Socio-economic background still counts for educational outcomes

Labour market outcomes vary considerably across skill-groups and regions

The tax wedge can be lowered further

Earnings remain relatively low and informality is still high

Participation in adult learning remains low

Larger households have weaker incentives to take up work

The participation of very young children in ECEC remains low

Activation programmes can improve further

Regional disparities are large, reflecting differences in productivity

Disparities are growing

Agglomeration economies are at work

Demand for jobs is higher in more productive regions and for qualified professionals

In Lithuania, urban-rural gaps in educational achievements are large

Smaller schools are associated with weaker outcomes and higher cost everywhere

Educational outcomes in small schools are weaker, while cost is higher

Vocational education and training, including apprenticeships, is weak

Firms contribute little to university funding in Lithuania

The minimum wage has a strong bite in less productive regions

Transport infrastructure needs improvement

The digital divide between regions is stark

House prices are low in Lithuania but vary across regions

High home ownership rates could create a barrier to labour mobility

Many apartments need upgrading

Housing supply seems not to follow demand

Urban sprawl is increasing, pushing up infrastructure cost

Lithuania is highly centralised

Local investment is low and declining