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Lithuania's economic growth to accelerate in 2017, reforms needed: IMF

Xinhua, November 3, 2016 Adjust font size:

Lithuania's economy will grow by 2.6 percent this year and accelerate to 3.0 percent in 2017, International Monetary Fund (IMF) revealed in its report for Central, Eastern and Southeastern Europe here on Wednesday.

Despite the momentum of growth, the IMF said continuation of structural reforms is needed in order to boost productivity.

IMF said Lithuania's GDP projection for this year is more optimistic than the 2.3 percent growth rate projected by Lithuania's ministry of finance and the country's central bank.

Ernesto Crivelli, an economist at IMF European department, noted here that Lithuania and other Central, Eastern and Southeastern European countries face major challenges regarding their productivity, therefore, purposeful reforms are needed.

The representative of IMF put special emphasis on government's effectiveness, noting that it is in large part determined by effective public investment management and tax administration.

"Given public investments and tax administration in the Baltic States would achieve the level of the countries with the best quality practice, Lithuania, Latvia and Estonia could increase the level of GDP up to 4 percent over the medium term," Crivelli was quoted as saying by local website vz.lt.

Meanwhile, Jorg Decressin, deputy director of IMF European department, underlined the Baltic States must tackle migration challenges if they wish to maintain economic growth, ELTA news agency reported.

According to him, good prospects must be created for potential emigrants to stay in the country and this will require investment in public infrastructure and education as well as continuation of structural reforms in order to boost productivity.

"We see reviews prepared by IMF analysts as an impartial glimpse into major economic challenges, which, of course, include issues of the efficiency of public investment and tax administration," Tomas Garbaravicius, member of the board of the Bank of Lithuania, was quoted as saying in the bank's statement.

According to him, addressing these challenges can "greatly influence the growth of our economy and other economies in the region."

The IMF's Regional Economic Issues is published twice a year to review developments in Central, Eastern, and Southeastern Europe. Endit