Lithuania has recovered its former highest place in the world competitiveness index published by the Swiss Institute of International Management (IMD). In 2022, it ranks 29th among 63 countries.
“To increase the competitiveness of Lithuania, we must seek changes in a number of fields – from stability of economic environment to effective work of the public sector,” Economy Minister Ausrine Armonaite is quoted in a press release by Innovation Agency Lithuania. “The present situation in the region certainly brings even more challenges.”
She noted that the government set up Innovation Agency Lithuania to implement “decisions with long-term effect”.
Stable economic environment is the largest challenge for the competitiveness of the Lithuanian economy, according to analysts of Innovation Agency Lithuania.
“Back in 2020, we were pleased with our economy’s resilience and stable growth during the pandemic. However, we failed in retaining our relative advantage – most of other global economies experienced faster growth last year than we did. Maintaining our previous advantage of economic environment in the present geopolitical environment may be complicated,” says Jone Kalendiene, Head of Research and Analysis Division of Innovation Agency Lithuania, in the press release.
Rising prices, shortages of raw materials, political challenges, dearth of labour are causing concern for business.
No significant changes in taxation took place last year, but there’s growing pressure from businesses on the authorities to cut taxes. This will not be easy to do, because of growing interest rates on debt and pressures on budget expenses.
“The estimate of improving economic competitiveness in Lithuania was favourably impacted also by growing business effectiveness. Growing effectiveness of business financing has been observed for several years in a row. By this indicator, Lithuania jumped from 48th place in 2020 to 40th place in 2022,” according to Kalendiene. “Active efforts of private and governmental institutions aimed at improving financing access for Lithuanian enterprises have already been felt by businesses.”
According to the IMD, one of the big challenges for all economies is the increased significance of social responsibility. In 2022, social responsibility of Lithuanian business was ranked above average, and by this indicator Lithuania moved forward quite strongly (from 37th place in 2021 up to 11th place in 2022).
The IMD has been compiling competitiveness ratings since 1989. Lithuania has been included since 2007.
Among the Baltic States, the top position is held by Estonia, which stands 22nd this year. Latvia is ranked 35th. (LRT/Business World Magazine)
