IMF tells Lithuania to pause on minimum wage hikes

“To preserve the gains of the past you have to make sure that wage growth does not go ahead too much and in this context we would advise you to pause minimum wage hikes which have been steep since 2012,” Christoph Klingen, chief of the IMF Staff Mission to Lithuania, said at a news conference on Wednesday.

Lithuania raised the minimum wage several times over the last several years. In January, the minimum monthly pay went up from €325 to €350. However, it is still the smallest rate in the Baltic States.

The growth of the country’s economy this year should accelerate to 2.7% as external environment became less of a factor to the growth of exports, inflation was low and sometimes even negative and public finances were in good shape, Klingen added.

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Lithuania’s Prime Minister Algirdas Butkevičius assured that the government would take into account the IMF’s recommendations and said that the Cabinet would not rush with further minimum wage raises.

“Earlier optimism that the minimum wage should be raised as often as possible is no longer here. It’s also necessary to consider the economic situation in regions, so we will act very responsibly,” he said at the news conference.

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