Country report Lithuania - Work Package 1 Ex post evaluation of Cohesion Policy programmes 2007-2013, focusing on the European Regional Development Fund (ERDF) and the Cohesion Fund (CF)

In Lithuania, the strong economic expansion prior to the financial crisis was accompanied by growing imbalances which contributed to a deep economic recession in 2008-2009. The economy began to recover in 2010 and continued to grow at well above the EU average rate in the following years, despite continuous fiscal consolidation. Unemployment, which was only around 4% in 2007, rose rapidly during the recession years to over 15% in 2011. Although it declined with the recovery, it was still around 9% in 2015 implying a pressing need for more jobs.

Fiscal consolidation combined with economic growth reduced the deficit, which in 2009 rose to 9% of GDP, close to balance in 2015, though at the cost of tight constraints on public finances. As a consequence, EU funding became an even more important source of finance for development expenditure.

Although a single NUTS 2 region, there remain significant disparities between urban and rural areas in social and economic development. Indeed, these widened over the period as recovery from the recession occurred. Growth was, therefore, concentrated disproportionately in the higher income regions.