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Lithuania has combined rapid EU income convergence with energy decoupling from Russia and defence spending above 5% of GDP; the structural test is whether security mobilisation, renewable investment and EU funds raise productivity fast enough to offset ageing and a shrinking labour base.

1 publication1 structural dossier
LATEST STRUCTURAL DOSSIER · October 04, 2026

Lithuania: security-state investment, energy decoupling and the productivity limits of Baltic convergence

Lithuania has combined rapid EU income convergence with energy decoupling from Russia and defence spending above 5% of GDP; the structural test is whether security mobilisation, renewable investment and EU funds raise productivity fast enough to offset ageing and a shrinking labour base.

Read full dossier 14 analytical sections

What the dossier covers

  1. Scope: a small economy whose geography magnifies external dependence
  2. Historical memory is part of the security model
  3. EU and NATO accession converted sovereignty into institutional embedding
  4. The political system combines a strong presidency in foreign affairs with parliamentary government
  5. Convergence has been substantial but is slowing as the easy gains fade
  6. Growth remains strong despite repeated external shocks
  7. Domestic demand is carrying more of the growth burden
  8. Inflation remains the main short-term macroeconomic friction
  9. Wage growth is strong because labour is scarce
  10. The labour market is tight even though unemployment is not exceptionally low
  11. Demography is a binding constraint despite recent positive migration
  12. Population ageing changes the fiscal value of every worker
  13. Pension reform creates a short-term demand boost and a long-term fiscal question
  14. Public debt is still moderate but rising quickly under current plans
CORPUS

Related research

Canonical publications where the country is material to the analysis.

Strategic Transitions
LithuaniaBaltic statesdefenceenergy securityproductivity

Lithuania: security-state investment, energy decoupling and the productivity limits of Baltic convergence

Lithuania has combined rapid EU income convergence with energy decoupling from Russia and defence spending above 5% of GDP; the structural test is whether security mobilisation, renewable investment and EU funds raise productivity fast enough to offset ageing and a shrinking labour base.

Read research