Lithuania ranked as poorest EU country

 

Lithuania’s “average poverty” indicator dragged down by high income inequality and low productivity

 

According to the “average poverty” methodology developed by an economist from Oxford University, which calculates the time it takes to earn $1, Lithuania turned out to be the poorest country in the European Union.

 

There are various indicators, experts remind us, and this one is particularly unfavorable for Lithuania. However, it highlights the country’s weaknesses that need to be overcome.

 

Lithuania’s economic progress cannot be denied, as traditional statistics show. 22 years ago, when Lithuania joined the European Union (EU), the country’s gross domestic product (GDP) per capita was 48% of the Community average, and now it reaches 87%.

 

In 2025 Lithuania, in terms of GDP per capita – it amounted to 36,500 euros in purchasing power parity – led the Baltic countries and surpassed countries such as Poland, Portugal or Greece.”

 

This means that for the lowest wage in the European Union we make 87% of the Community GDP average. Where does the wealth we create go? The Lithuanian elite takes it away – to Greece, the United Kingdom and other sweet spots. We are left with bones. Who is to blame? We ourselves. Our voting in elections has bad consequences for ourselves.

Based on data from April 2026, Lithuania was indeed rated as the “poorest” EU country according to the new “average poverty” methodology developed by Oxford University economist Olivier Sterck, which measures the time it takes to earn 1 US dollar (in purchasing power parity).

Here are the main highlights and context of this assessment:

 

The essence of the indicator: According to this method, at the beginning of 2026, Lithuania took the longest time in the EU to earn $1 – 76.4 minutes. For comparison, in the least poor country – Luxembourg – it took about 21 minutes, and in neighboring Estonia – 51 minutes.

 

Here are some key highlights that help you understand where Lithuania’s created value “disappears”:

 

Labor-capital ratio. In Lithuania, a relatively large share of GDP goes to capital (corporate profits) rather than to wages, compared to Western Europe. This means that although we create a lot of value, a larger part of it remains with business owners and goes to Greece, the United Kingdom and elsewhere, rather than to Lithuanian workers.

 

Shadow economy. A significant part of the wealth created still circulates “in the shadows”. This reduces budget revenues, which should be used to finance public services: medicine, education and pensions.

Low added value. Although we have reached 87-90% of the EU average in terms of GDP per capita (purchasing power), we still lead in sectors that require a lot of labor but pay low wages (e.g. transport, furniture production).

Redistribution through the budget. Lithuania redistributes one of the smallest shares of GDP in the European Union. This directly correlates with the voting consequence mentioned here: the chosen direction of low taxes and weak public services leads to high social exclusion.

A small public sector and high income inequality are systemic problems that can only be changed by long-term political solutions, supported by a fair vote of voters for the implementation of voters' own expectations.

Readers' comments:

 

AAAAkvadratu”

“If compared to Europe, the system is definitely not favorable to the bottom. The tax system is regressive, pensions are low, property taxes are low, the poverty rate is the highest in the EU, how is that system favorable to the bottom? Can you be more specific?”

 

Mauras:

 

“A relatively small portion of customers (e.g., the top 10-20 percent) hold the majority – about 70-80 percent – ​​of all household deposits in Lithuanian banks.”