Nerijus Mačiulis: Is Lithuania Truly the Poorest Country in the EU?

As a leading Lithuanian publication, Delfi often delves into the complexities of our nation's economic landscape, and the question of whether Lithuania is the poorest country in the EU warrants careful examination. While recent data shows robust retail growth of nearly 6% and strong domestic demand, fueled by wage increases, some analyses point to persistent poverty. It is crucial, however, to distinguish between relative and absolute poverty. The commonly used EU metric for relative poverty – income below 60% of the national median – can increase even when everyone's income rises, as it did in Lithuania with faster wage growth in the public sector compared to pensions. This metric, while highlighting income inequality, doesn't necessarily reflect a decline in living standards or purchasing power for the majority. Absolute poverty, which measures the lack of basic necessities, remains around 7% in Lithuania, only slightly above the EU average. While poverty is a serious issue that requires attention, sensational claims of Lithuania being the 'poorest' often stem from a misunderstanding or deliberate misuse of these statistics. From our perspective, the focus should be on addressing the root causes of poverty and ensuring economic progress benefits all segments of society, rather than using relative poverty figures to fuel arguments for higher taxes or the depletion of state reserves. We must look critically at where state funds are used inefficiently before considering further taxation.