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Lithuania’s progress surpassed IMF expectations

Date

2003 03 31

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Vilnius, 31 March, 2003. Dalia Grybauskaitė, Minister of Finance of the Republic of Lithuania will meet John Odling-Smee, Director, European II Department of the International Monetary Fund and his Advisor, Patricia Alonso-Gamo, IMF Mission Chief. The anticipated topic for discussion at the meeting is the outcomes of the final phase of the Memorandum of Economic Policies between the Government of the Republic of Lithuania and IMF as well as new forms of future co-operation.

“We are almost certain that the outcomes of the final phase of the Memorandum, as well as the final progress review, which should be published by IMF shortly, will be favourable to Lithuania”, said Dalia Grybauskaitė before the meeting. According to the minister, expectations of positive assessment can be based on the economic developments of Lithuania, which look impressive indeed, and the position of IMF representatives and the Executive Board, which has already been stated earlier”.

IMF Executive Board stated on 10 March that Lithuania had achieved impressive results, and “Lithuania’s economy has proven resilient and flexible in the face of the global economic downturn”. The Board emphasised that GDP growth driven by exports and increased domestic demand, having reached 5.9% had surpassed even the most optimistic expectations. IMF Mission Report also stresses that in 2002, under preliminary estimations, the fiscal deficit of the general government budget was 1.2%, i.e. lower than the established limit of 1.5%. Zuzana Brixiova, IMF Resident Representative in Lithuania, in presenting the assessments of IMF Executive Board, has recently stated that “Lithuania has come to be considered a star among the countries which the IMF reviews.”

In April, IMF Executive Board intends to present a final assessment report, which should review actions of the Government and progress made throughout the whole period of validity of the memoranda of economic policies between the Government of the Republic of Lithuania and IMF, i.e. the period between the beginning of 2000 and 31 December 2002, when the programme of rehabilitation and enforcement of Lithuania’s macroeconomic stability envisaged by the Memorandum.

Upon expiry of the validity of this Memorandum, no new similar document will be signed. The Ministry of Finance is convinced that Lithuania should continue co-operation with the IMF, however, the forms of co-operation should change substantially as the country’s economic situation changes.

“The Pre-cautionary Stand-by Arrangement developed jointly with IMF in the end of 1999 was an inevitable necessity under the then conditions, and its positive impact upon the country is beyond doubt. However, at present Lithuania has stabilised its macroeconomy, growth prospects are obvious, the country has acquired experience in the field of finance management, which is already being shared with other states”, said Dalia Grybauskaitė. According to her, Lithuania will continue pursuing prudent fiscal policies, co-operation and consultancy with IMF, however, there is no need for Lithuania to sign an arrangement similar to that, which had been signed, when the country had been threatened by a financial crisis.