Lithuania Economic Indicators

Lithuania: a resilient economy at the crossroads of innovation and growth

Lithuania, a Baltic nation at the forefront of economic resilience and innovation, exemplifies how a small yet agile country can thrive in a fast-changing global landscape. With its strategic location, highly skilled workforce, and a strong focus on digital transformation, Lithuania has positioned itself as a key player in Europe’s economic ecosystem. Despite facing global challenges, the country’s steadfast commitment to sustainability, technological advancement, and inclusive growth paints a compelling picture of its future trajectory.

Source: Lithuania: Your Targets. Exceeded, Invest Lithuania, February 2024.

Lithuania’s economic outlook: growth and stability among challenges

In 2023, Lithuania’s economy demonstrated resilience and adaptability, achieving a nominal GDP of USD 78.3 billion. This reflects the country’s balanced economic structure, which integrates traditional industries like manufacturing with high-growth sectors such as ICT and financial services.

Strategically positioned as a gateway between Western Europe, the Nordics, and Eastern markets, Lithuania leverages its geographic advantage and EU membership to enhance trade integration and attract global investors. These strengths support its ambition to remain competitive in a rapidly changing global economy.

Although Lithuania experienced a mild contraction of -0.3% in 2023 due to elevated inflation and weakened external demand, the outlook is positive. GDP is forecast to grow by 2.2% in 2024 and 3% in both 2025 and 2026, driven by robust private consumption, declining inflation, and a rebound in investments starting in 2025. Services exports are expected to remain strong, while goods trade is anticipated to recover more gradually.

Inflation is projected to fall significantly to 0.9% in 2024, following declines in energy and food prices, and stabilize at 1.7% in 2025 and 1.6% in 2026. Labour market dynamics will evolve, with unemployment temporarily rising to 7.5% in 2024 due to refugee inflows but decreasing to 6.9% by 2026. Wage growth is expected to remain strong but moderate over time.

Fiscal challenges persist, with the government deficit expected to rise from 2.0% of GDP in 2024 to 2.6% in 2026, driven by increased social spending, public wages, and interest payments. Public debt is also projected to grow from 38.3% of GDP in 2024 to 44.6% in 2026.

Source: Economic forecast for Lithuania, European Commission, November 2024.

Despite these challenges, Lithuania’s focus on sustainability, digital transformation, and strategic investments positions it for long-term growth, ensuring a resilient and future-oriented economy.

In addition, Lithuania is doubling down on upskilling initiatives, particularly in digital competencies and STEM fields, to prepare its labour force for emerging industries. These efforts not only address current skill mismatches but also position Lithuania as a hub for future-ready talent, capable of meeting global market demands.

Foreign Direct Investment (FDI): a global magnet

Lithuania’s reputation as a business-friendly destination continues to grow, with the country ranking 2nd in the EU for Greenfield FDI performance in 2023. Sectors such as ICT, manufacturing, and professional services have attracted significant interest, thanks to Lithuania’s skilled workforce, transparent regulations, and proximity to key markets.

Source: Lithuania. Where big plans turn into even bigger results, Invest Lithuania.

The government, through initiatives like Invest Lithuania, actively facilitates investor relations, providing a seamless entry for international businesses. As a result, Lithuania has become a hotspot for innovation-driven ventures, particularly in areas like fintech, cybersecurity, and AI solutions, further enhancing its global economic profile.

Pillars of growth: technology and education

Lithuania’s ICT sector is a cornerstone of its economic strategy, employing over 68,200 professionals and contributing significantly to GDP. This thriving sector benefits from world-class infrastructure, government incentives, and an entrepreneurial ecosystem that nurtures both startups and global players. Lithuania’s leadership in areas such as e-governance and digital health positions it as a model for technological innovation in Europe. The integration of tech solutions across industries further cements the country’s role as a global tech hub.

Lithuania’s education system stands out as a key driver of its economic success, ranking 1st globally for digital and technological skills.

Source: Lithuania: Your Targets. Exceeded, Invest Lithuania, February 2024.

The country’s commitment to STEM education and lifelong learning ensures a steady pipeline of talent for its innovation-driven industries. Lithuania boasts diverse and driven tech talent, perfect for powering technological growth. The country’s educational system and continuous investment in skill development ensure a steady supply of top-tier IT specialists.

Source: Lithuania: Your Targets. Exceeded, Invest Lithuania, February 2024.

Collaboration between academia and industry is central to this success, fostering a culture of research, innovation, and practical application. By aligning education with economic priorities, Lithuania is building a workforce capable of sustaining its growth trajectory in the digital age.

In addition, Lithuania is fostering a culture of inclusive growth and continuous learning through targeted initiatives that empower individuals to excel in the digital age. Women Go Tech, launched in 2016, has reached 11,700 participants, enabling 700 women to transition into tech careers through its innovative mentorship and community support model. Complementing this is a national reskilling programme, backed by the government, which aims to equip 20,000 high-value specialists with expertise in IT, engineering, life sciences, automation, and business process digitisation. Furthermore, partnerships like the Google Talent Empowerment program and Turing College are strengthening Lithuania’s workforce by providing advanced training in digital marketing and data analytics, preparing professionals for the demands of an increasingly digital economy. These initiatives reflect Lithuania’s commitment to diversity, lifelong learning, and future-ready skills development.

Explore more about Lithuania’s economy

• Invest Lithuania: Annual Reports and Insights.
• IMF Country Report on Lithuania.
• Lithuania – EU country profile, EUROSTAT.
• OECD Skills Strategy Lithuania.
• Lithuania 2024 Country Report, European Commission.

Watch and learn

• Invest Lithuania YouTube channel.