Lithuania

Lithuania's short-term political risk rating remains subdued on account of a poor score in the social stability component of our rating. Lithuania scores just 55.0 in this category, despite few signs of public unrest or high inflation. Our short-term political risk rating is primarily weighed down by high unemployment, which continued to tick higher in recent quarters, hitting 18.3% in Q210, the highest level on record. Long-term unemployment also ticked higher to 7.4% in Q2, while youth unemployment hit a new record high of 37.1% during that period. With more fiscal consolidation on the government's agenda, we caution that the poor labour market outlook could begin to spill over into the public unrest component of the rating.

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