Vilnius once again overtaken Riga and Tallinn

As everyone who lives here or is still planning to settle down, the Luminor Bank chief economist Žygimantas Mauricas may comment on.

– What does it mean that we have become the richest city in the Baltic region and exceeded the European Union average?

– It means a lot, because historically, we have always been the European Union average and we were compared to others. In other words, we entered the higher league – some cities are already comparing to Vilnius. Some of them – Riga, Tallinn – are certainly watching some jealousy as Vilnius has danced up so strongly that it has been able not only to move away from Riga, but also to overtake Tallinn.

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– How can anyone in Vilnius or living here feel that richness?

– First of all, there are great employment opportunities. The number of workers in Vilnius is growing very fast, much faster than in Tallinn or Riga. Wages and pay are also growing. Opportunities are also wider: we have a developed high -tech service sector, growing industry. This allows people to exploit their potential. A lucky person is the one who can work what he likes. Vilnius is a city that can already meet most such needs. No need to look at Western Europe or emigrate to other cities – most of the happiness can be found in Vilnius.

– Will it not be that we will begin to feel rich in expensive – rising prices?

– Prices – the other side of the coin. Richer people naturally open their wallets, so prices are rising. This is especially felt in the housing segment – housing, especially in the central part of the city, certainly not for everyone. In this respect, we are equated with the capitals of the Scandinavian countries, even with London or Paris. In other words, even when earning an increase in wages, buying a home in Vilnius is not easy.

– You can say that we have something to enjoy – more and more opportunities to make money. But as you say, there is the other side of the coin – we are spending more and more.

– Yes, no doubt. However, revenue growth is faster than spending. According to purchasing power, Vilnius is slightly above Tallinn and Riga, calculating nominally.

Sigismund Mauric. Photo by J. Elinsk / BNS

– When it comes to Tallinn – for a long time it was like a Baltic signpost star. What happened to Estonians that they were going down?

– Maybe not so much something happened to Estonians as many good things happened to us. We moved forward very hard. We have our own unicorns – billions of companies that grew up practically from scratch. We have many companies that have been able to attract a lot of large foreign investment, the developed industry, the service sector. We have a dynamic, fast -growing city. In addition, Vilnius has already overtaken Riga in terms of population and became the largest city in the Baltic States. Officially, this will probably be announced in the coming days.

– Isn’t it that we have Vilnius and the rest of Lithuania?

– Depends on who we compare with. If we look at the overall picture of our country, the power of Vilnius is relatively increasing, creating an increasing economy, currently about 45 percent. However, this is still less than in Latvia or Estonia, with about 70 % in Riga and over 60 % in Tallinn. Thus, we are not a state of one city and we will probably not become such, as Kaunas and other regions of Lithuania are growing rapidly.

– What are your predictions? Will you manage to remain the richest city?

– We have a lot of external factors, but it is gratifying that we have already had practically the last five years, but the Lithuanians have proven to find a way out in any situation, and that solution materializes the growing Vilnius. It is to be hoped that we will continue to be inventive.

We are increasingly dependent on our capital, we are not dependent on foreign capital – we do a lot of foreign investment in our own power. However, of course, perhaps the threat is more threatened by the mixing of the lights to myself – especially I am talking about tax increases, which is hardly needed at the moment, because due to the rapid economic growth, our budget deficit was the lowest in the whole region last year.

This is the consequence of the miracle created by Vilnius and also the rest of Lithuania. If we stop that growth, we can get stuck at those 100 or more percent of the European Union average. In other words, we will reach the average and stop in a medium -income trap.