16/11/2007 8:13:03 am
In a Cold Vilnius With a Hot Economy. The beautiful Old Town of Vilnius these days is frosty indeed. But all the new cars and newly built skyscrapers in the other parts of the capital suggest that the economy is doing well. And Lithuania has been one of the Baltic tigers, with strong growth of prosperity, due to substantial reforms during the past decade or so.

This year, GDP growth is projected to be more than 7 per cent. Average household income will rise by 12 per cent. Exports and imports rise by about 15 per cent each - in this one year alone. Taxes as a share of GDP has fallen from 41 per cent in 2000 to 32 per cent this year. It is probably both a cause and consequence of the high growth rates.

This doesn′t mean that reforms should stop here and now. Still, Lithuania′s GDP per capita is still just 58 per cent of EU average. And studies point to a need for reforms in several sectors, such as labour market, higher education and health care. That way, Lithuania can not just close the gap with the EU average but pass it - like Ireland did.