Lithuania - Economic development

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In 1990, the Lithuanian government began a comprehensive economic reform program aimed at effecting the transformation to a market-driven economy. Reform measures include price reform, trade reform, and privatization. By mid-1993, 92% of housing and roughly 60% of businesses slated for privatization had been privatized. By 1996, about 36% of state enterprises and about 83% of all state property had been privatized. International aid agencies committed about $765 million of assistance between 1992–95. Most international aid went either to infrastructure construction or loan credits to business. Citing continued progress toward democratic development, in 1999 the United States announced that it was terminating economic assistance to Lithuania. Having established itself as a democratic society with a market economy, Lithuania was invited to join the EU in 2002.

In 2001, Lithuania negotiated a 19-month, $119-million Stand-By Arrangement with the International Monetary Fund (IMF). In 2002, the country's GDP grew at a rapid pace (6–6.7%), unemployment was declining, the inflation rate fell to near zero, and there was a lower-than-expected general government deficit. In 2002, the tax system was aligned with EU requirements, the financial situation of municipalities and the Health Insurance Fund was improved, privatization moved forward and the financial sector was strengthened. The privatization program for 2003 included the sale of a second 34% stake in Lithuania Gas, one or two electricity distribution companies, and four alcohol producers.

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