Income inequality jeopardizes Lithuania's sustainable economic growth: central bank

Source: Xinhua| 2017-10-06 00:37:57|Editor: huaxia
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VILNIUS, Oct. 5 (Xinhua) -- Income inequality significantly increased recently in Lithuania and posed risk for sustainable economic growth, Vitas Vasiliauskas, chairman of the board of the country's central bank, said Thursday.

"The economy has been growing for some time, yet the fact that not everyone benefits from this growth to equal extent raises concerns," Vasiliauskas was quoted as saying in a bank's statement.

He made the remarks at the Economics Conference organized by the Bank of Lithuania.

In Vasiliauskas' words, income level differentials have been widening for the last few years. "Unsolved income inequality issues may have painful consequences on the country's economic development."

According to Eurostat, income inequality in Lithuania is among the highest in the EU.

In 2012, the income of the 20 percent of the most-earning Lithuanian residents was five times higher than that of the 20 percent of the poorest residents. In 2016, this indicator rose to more than seven times. The EU average is five times.

"Income inequality should, and must be reduced without delay; the first thing to do is to undertake really changing the tax, pension and education systems," Vasiliauskas noted.

Vilius Sapoka, Lithuania's minister of finance, at the same conference pointed to the fact that income inequality has become one of the main barriers for growth also in other countries.

Sapoka promised that measures taken by the Lithuanian government, such as increase of tax-free income, minimum monthly wages, pensions and social benefits, will contribute to reducing income inequality in the Baltic country.

Currently every fifth Lithuanian resident still lives in poverty. A large share of those in need are employed people trying to maintain their families with low wage, unemployed and pensioners, according to the central bank's statement. Enditem