Summary: Lithuania has achieved significant macroeconomic rebalancing since the 2008–09 crisis, and vulnerabilities have diminished. The current account and fiscal deficits were substantially reduced, debt has fallen in most sectors of the economy, and wage compression quickly restored competitiveness. The latter laid the basis for a strong exportled recovery, which shifted the engine of growth to the tradable sector. Vulnerabilities have declined in the largely foreign-owned banking sector, as the loan-to-deposit (LTD) ratio has dropped markedly. GDP per capita has recovered to its pre-crisis peak, although Lithuania’s shrinking population also contributed to this.

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