Who makes what in Lithuania

Fast growth in salaries brings some threats

Lithuania’s statistics department reported the average monthly salary before taxes in the first quarter 2007 rose one-fifth from the respective period in 2006, reaching 503 euros. In the opinion of international and Lithuanian analysts, fast growth in salaries and consumption is accompanied by some threats.

Vidmantas Saferis, head of the Economic Analysis Division of Hansabankas, says corporate profitability indicators suggest that companies still have reserves for raising salaries further, though salaries growing faster than labor productivity does not bode well for the economy.

Concerned about threats to Lithuanian economy, the international rating agency Standard & Poor's has already changed Lithuania's borrowing perspective from stable to negative and warned the country not to spend too much money.