The Economic Activity of Lithuania
After establishing its independence from the Soviet Union in the 1990, its economy transitioned into capitalist free market principles. Under the Soviet Union, most of its economic activity trade was conducted with Russia. Since their independence, their trade shifted their orientation to Western Europe and North America.
The first few years of this transition posed troublesome times for the country. Challenges included a banking crisis, and industrial production dropping by 36% through 1992 and 1994.
Despite these setbacks, Prime Minister Adolfas Slezevicus was however willed to adhere to the recommendations from the International Monetary Fund (IMF) for the recovery of the Lithuanian economy. Economic recovery slowly trickled in mid-1993 and was mostly brought about by loans and investment, foreign assistance, and private sector employment. On February 2, 2002, Lithuania’s national currency, the Litas, was pegged to the Euro at the rate of 3.4528 Litas for 1 Euro. In 2003, Lithuania had the highest economic growth amongst all candidate members of the European Union. The country became a member of the European Union in May 1, 2004.
Foreign Direct Investment of the country increased 4.6% from 2004-2005. The minimum wage currently stands at 800 litas (€231). The Litas is expected to shift to the Euro in 2013. The average wage in 2008 Q2 was 2237LTL (€648). The United Nations classify Lithuania As a country with high average income.
Lithuania has boasts well-maintained the infrastructure both modern, and inherited from the Soviet period. These days there is a progression towards a “knowledge-based’ economy, concentrating on biotechnology, mechatronics and information technology.