Lithuania’s wage and labour productivity dilemma

Lithuania, along with Hungary, Latvia, Romania and Bulgaria, offer the lowest production costs in the EU, the latest Eurostat data shows.

Average hourly labour costs in the manufacturing industry in Lithuania in 2015 was €6.7 and it was 6.3% higher than in 2014. Labour costs in Latvia have grown 8.1% in a year and are now the same as in Lithuania. Labour costs in Poland have also grown 6.4% over the year, to €8.6 per hour.

Economists warn that with rising labour costs, over the next 3-4 years Lithuania may find itself in the same situation as Estonia where salaries are 1.5 times higher and are growing faster than labour productivity, which undermines the country’s competitiveness in export markets.

Verslo Žinios