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Economy
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Economic overview: Since declaring independence in 1990, Lithuania
has implemented reforms aimed at eliminating the vestiges of the
former socialist system. With the help of the IMF and other
international institutions, the government has adopted a disciplined
program to restrain inflation, reduce price controls, lower the
budget deficit and privatize the economy. Lithuania has embarked on
a series of price liberalizations; most price controls have been
abolished. More than two-thirds of its industrial facilities as well
as most housing and agricultural enterprises have been privatized,
although important "strategic" enterprises have been exempted from
privatization - namely energy and telecommunications. While
Lithuania has reduced its trade dependence on Russia and other
republics of the FSU from 85% in 1991 to about 40% in 1995, Russia
remains Lithuania's leading trading partner. Lithuania has made
great strides in reducing its annual rate of inflation - from over
1,100% in 1992 to about 35% in 1995. Production bottomed out in
1994-95. A banking crisis beginning in September, during which
central bank reserves dropped one-third, held back growth in 1995.
If the government can stay the course on economic reform and fiscal
discipline - which may be politically difficult in the election year
of 1996 - Lithuania could be set for strong economic growth in the
near term. As for real resources, Lithuania's growth depends largely
on its ability to exploit its strategic location - with its ice-free
port at Klaipeda and its rail and highway hub in Vilnius connecting
it with Eastern Europe, Belarus, Russia, and Ukraine. Lacking
important natural resources, it will remain dependent on imports of
fuels and raw materials.

GDP: purchasing power parity - $13.3 billion (1995 estimate as
extrapolated from World Bank estimate for 1994)

GDP real growth rate: 1% (1995 est.)

GDP per capita: $3,400 (1995 est.)

GDP composition by sector:
agriculture: 20%
industry: 42%
services: 38% (1993 est.)

Inflation rate (consumer prices): 35% (1995 est.)

Labor force: 1.836 million
by occupation: industry and construction 42%, agriculture and
forestry 18%, other 40% (1990)

Unemployment rate: 6.1% (January 1996)

Budget