Asking the right questions is crucial in life. In Lithuania, we could more often ask ourselves – “how can I earn more?”

To the new Government, we propose three strategic directions and the support of the Investors’ Forum in each of them, aiming to make everyone more prosperous.

1. Higher Employment – €500 million to €1.5 billion

Only about 50% of Lithuania’s population is employed. They not only support themselves but, through taxes, also support the rest of society: seniors, people with disabilities, children, and the unemployed.

The greatest potential lies in the unemployed – we can turn them into active workers. To achieve this, we must create better investment conditions in the regions with the highest unemployment.

Unemployment in Poland or the Czech Republic is about half that of Lithuania (Eurostat – Unemployment statistics (2025)).

If Lithuania reached the level of its neighbors, about 80,000 additional people would be employed. Not only would they earn income themselves, but they would also no longer depend on public support (funded by other citizens).

Depending on salaries and current benefits, this would mean an additional €500 million to €1.5 billion annually for the national budget.

Let’s take the average – about €1 billion in extra annual revenue for the state budget, and even more income for the individuals who would start working.

2. Real Fight Against the Shadow Economy – €500 million

Many might think: “you can’t squeeze anything out of the shadow economy.” And that’s understandable – we’ve heard “we need to tackle the shadow economy” too many times without results, so few still believe it.

But the numbers show potential. According to the European Commission, Lithuania’s VAT gap is about 15%. Only Romania and Malta perform worse – we’re at the bottom (2022 data – European Commission – VAT Gap Report).

Some countries have completely eliminated this gap. If Lithuania achieved the same, the budget would grow by nearly €1 billion.

Let’s be realistic – completely eliminating it is too ambitious. But reaching at least the EU average is achievable. This would mean about €500 million in additional annual revenue.

It’s doable – especially considering that our neighbors Latvia and Estonia are already performing better than the EU average.

3. Productivity Growth – €1 billion

Average labor costs in Lithuania are about €15.5/hour, while the EU average exceeds €33/hour, and in Norway – about €50/hour (Eurostat – Hourly labour costs).

This means that, on average, a Lithuanian worker generates about half the value per hour compared to the EU average and four times less than in Norway.

It’s important to highlight: the share of GDP going to employees in Lithuania even exceeds the EU average, meaning that employers in Lithuania give a larger slice of the pie.

The problem is – the pie is too small. GDP per capita in Lithuania is twice as low as in Sweden.

Only 13% of employees in Lithuania earn more than €4,000/month, while more than 40% fall between the minimum wage and €2,000 – meaning that most work in medium rather than high value-added jobs (Verslo žinios – Wage distribution).

That’s why the real challenge is increasing productivity.

If Lithuania reached even the EU average, budget revenues could double – that’s an additional €10 billion. And this would be without any new taxes.

In the short term, this is unrealistic, but even 1% progress toward that goal would mean at least €1 billion more every year.

That is achievable – if we set a clear goal and work toward it consistently.

The “Investors’ Forum” and the “Baltoji banga” initiative are offering to present the Government with detailed proposals on how each of these goals can be achieved.

Insights by Vytautas Šilinskas, Executive Director of the Investors’ Forum association