Saturday, May 16, 2009

Lithuania: Lithuania heads to the polls

Lithuanian voters will elect a new president on Sunday. The country is in economic recession caused by the current international financial crisis Xinhua informs.

The European Union's budget commissioner Dalia Grybauskaite is the front-runner among the seven candidates. She has pledged to tackle the Baltic country's economic crisis as a top priority.
Lithuania's central bank said on Thursday that the economy was likely to see a sharp shrinkage of 15.6 percent this year, the worst among the 27-nation EU.

Lithuania has enjoyed the reputation of being one of the fast-growing economic "Baltic Tigers," notably since joining the EU in 2004. The other two "Tigers" are Latvia and Estonia.
Economic growth in the country was 7.8 percent in 2006 and hit a record 8.9 percent the following year, but slowed to 3 percent in 2008, after the U.S. subprime mortgage crisis in the autumn of 2007 spread to the European continent.

The situation has been getting worse ever since Western European countries began withdrawing their capital from Central Europe amid the economic crisis.

According to the country's central bank's forecast it will take Lithuania two to three years to recover. The economy is likely to contract 4.5 percent in 2010.

The bank also predicted that the country's jobless rate would increase to 11.6 percent this year from the current 8.7 percent and surge to 13.4 percent in 2010.

Both the government and the private sector have cut salaries to save spending. The overall income reduction is expected to be 12.3 percent this year and 5.2 percent next year.

Source: FOCUS Information Agency
Published by Mike Hitchen, Mike Hitchen Consulting
Putting principles before profits