LFMI news and activities: 2012 February

In February we have presented to society two important analytical works. The first one is a broad comparative analysis of employment regulation in Lithuania and in Estonia. It has confirmed our hypothesis that lawgivers in Estonia approach a lot of issues in this area in a more flexible and simple manner than Lithuanian lawgivers do. Despite having a „liberal“ (by Lithuanian standards) regulation of labour, Estonia is among top twenty countries in the Index of Economic Freedom, compiled by the Heritage Foundation (Estonia is 16th, and Lithuania is 23rd), with employment 5.5–5.3% higher than in Lithuania for quite a while.

The second analytical work is the 29th survey of the Lithuanian economy, a study we’ve been carrying out since 1997. This study is among one the first sources of alternative statistics in independent Lithuania. It is based on a non-representative poll of well performing companies as well as economic and financial analysts. The newest study shows that the expectations of market participants have fallen since the last survey: the forecast of GDP growth has been lowered from 4.6% to 2.7%. According to market participants polled by LFMI, the euro’s problems and the related risk that exports will slide (33% of those polled), potential increases in taxes and changes whatsoever in the tax regime (29%) and populist decisions associated with the upcoming parliamentary election (25%) are among the major sources of uncertainty and risks this year. The sum of the last two answers shows that most of the uncertainty and risks stem not from the market, but from possible government decisions and actions.

I would also like to invite you to an international conference that we are organising with our partners: The Eurozone in Crisis: Solutions and Future Prospects , which will take place in Vilnius on the 3rd of April. During the event, policy analysts from Lithuania and abroad will discuss the fiscal policy of the European Union countries, and the future of euro.

In addition, I would like to remind you that you can support the Institute. With this simple act you will help LFMI to continue our work. This is very important for us.