Wirtschaftslage und Reformprozesse in Estland, Lettland, und Litauen: Bericht 2001



erately accelerated inflation rate. The economic stimulation, however, took place
somewhat hesitantly, since the driving forces of foreign trade were not sufficiently pro-
nounced to compensate for the impulses from domestic trade that stayed weak. In spite
of increasing energy tariffs, as a result of rising oil prices, and the additional problem of
rising state-administrated prices, which caused a drop in eonsumer´s purchasing power,
private consumption experienced a stronger real increase last year than the GDP. How-
ever, government consumption continued to drop, following the austerity measures that
started in 1999, as well as the considerable cut of gross investments in 2000. Along
strongly expanding exports (in spite of the marked real revaluation of the Litas against
the EU-currencies), the import surplus decreased again; the share of the current account
deficit in the GDP lay beneath 10 percent for the first time since 1996. The increase in
public debt was cut down effectively. Nevertheless, the labour market did not profit
from economic recovery; the unemployment rate reached a new peak towards the end of
the year.

The confidence in Lithuania’s Currency-Board remained unbroken. In the Institutional
lnvestor´s financial rating list of March 2001, Lithuania is again considered to be again
further on its way up. In May this year, Lithuania as the last EU-candidate entered the
WTO as its 141st member state and its overall prospects for growth seem favourable. In
its third regular report on progress towards an access to membership of November 2000,
the European Commission acknowledged that, for the first time, Lithuania was having a
functioning market economy. In order to secure the undisputed economic success as
well as the realisation of liberal economic concepts, Lithuanian economic policy should
continue to be concentrated on workable public finances, an increased flexibility of the
labour market, on updating its production capacities among other things by strengthen-
ing its financial sector, on putting the new bankruptcy law into practice and on reform
provisions for pension schemes.

11



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