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2020.05.27 11:27

Lithuania’s post-corona 'spending spree’ hindered by red tape – Swedbank

LRT.lt 2020.05.27 11:27

Swedbank, a Swedish bank operating in the Baltic states, said in its May 26 report that Lithuania was well-placed for the economy to rebound quickly. However, excessive red tape hinders distribution of state aid.

According to Swedbank, “the pandemic highlighted the value of good policy and capable public administration”, with the report praising the early lockdown action taken by the government, despite “ill-preparedness” of the country’s health system.

The country’s low-population density also helped keep the virus under control.

Read more: Low population density is a blessing for Baltic states during Covid-19 pandemic – analysis

The country is planning a “recovery spending spree” which presents an opportunity to improve digital infrastructure “that could facilitate green and sustainable growth”.

Read more: Lithuania unveils €6.3bn 'DNA of the Future' economic stimulus plan

The government’s willingness to dip into debt showed that, “probably for the first time since independence, the government has the fiscal firepower to enact a meaningful countercyclical policy”.

However, the “excessive red tape and lack of administrative capacity, the distribution of support in many cases has been somewhat disappointing”.

Read more: Saving businesses will not save the people – opinion

According to Swedbank, “human capital is just as important,” and “the reversal migration trends will help in improving the medium-to-long-term growth outlook”.

The full report on Nordic and Baltic countries is available here.

Read more: Swedbank failed to mitigate scandal damage in Lithuania