Anyone earning over €900 per month in Lithuania can be considered middle class, according to the Organisation for Economic Co-operation and Development (OECD). However, the reality might be different.
In its statistics, the global economic organisation OECD says people earning between 75% and 200% of the national median are classified as middle class. This means that the middle class in Lithuania includes people earning between €1,363 and €3,634 before tax, or between €930 and €2,200 after tax.
According to a recent survey by Swedbank, 51% of people in Lithuania consider themselves to be in the middle class.
The survey showed that people are more satisfied with their income this year than a year ago and people’s incomes have grown by around 10% over the past year, while prices have risen by 1%.
But income is not the only parameter defining the middle class – they still need to afford to save, go on holidays abroad at least once a year, purchase real estate and save for their retirement.
Tadas Šarapovas, director of ISM’s Economics and Data Analytics Studies Programme, explained that the middle class is mostly represented by people who create above-average value through their economic activity.
“These can be specialists – engineers, doctors, teachers, financiers, senior civil servants – or representatives of small and medium-sized businesses whose after-tax income amounts to more than €2,000 per person,” the professor told LRT.lt.
This is enough money to cover basic needs, as well as to save and afford holidays, Šarapovas said.
“Thus, we can consider such a monthly salary [€2,000] to be a certain minimum that could characterise a middle-class person,” he added.
When assessing the weight of the tax burden on the middle class, Šarapovas said that both the population and business were adapting to the tax environment and the tax burden. The problem, he said, is how stable the tax system is.
“It depends on how often new taxes are introduced, how often existing taxes are changed. Ideally, citizens and businesses can expect a predictable government fiscal policy in the longer term and can be more or less confident that taxes will not suddenly increase,” the professor said.
Šarapovas also stressed that the middle class in Lithuania, like the rest of the people, faced problems with the quality and accessibility of public services.
“Typical examples are the shortage of teachers and doctors, civil servants, which means that the quality of services does not meet the public’s expectations in terms of the amount of taxes paid,” he said.
“As a result, those who earn more, even though they pay the taxes that support the public sector, opt for private education, private treatment and medical services, at an extra cost,” Šarapovas added.
Whether a person is middle-class also comes down to individual consumption expenditures, according to Akvilė Aleksandravičienė, associate professor and head of the Economics Programme at the Faculty of Economics and Management of Vytautas Magnus University.
She acknowledged that the middle class with lower incomes (75–100% of the median income) “may have limited opportunities to invest, save, travel abroad and do other things”.
Lithuania also has one of the EU’s highest tax burdens on labour income, which affects the middle class.
“In this respect, we are in line with countries such as Denmark, Belgium, Germany, etc,” Aleksandravičienė said.
Tadas Povilauskas, an economist at SEB Bank, argued that the situation of the middle class was improving in 2024 and should have recovered after the more difficult 2022 and early 2023 when inflation far outpaced income growth and purchasing power fell.
“This year, average wages will grow by more than 9% and inflation will be around 1%, so the situation is improving,” he said, adding that the situation for lower earners is improving at a faster pace.
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