In 2003, prior to joining the European Union, Lithuania had the highest economic growth rate amongst all candidate and member countries, reaching 8.8% in the third quarter. In 2004 — 7.3%; 2005 — 7.6%; 2006 — 7.4%; 2007 Q3 — 10.8% growth in GDP reflects the impressive economic development. Most of the trade Lithuania conducts is within the European Union.
It is a member of the World Trade Organization, and the European Union. By UN classification, Lithuania is a country with a high average income. The country boasts a well developed modern infrastructure of railways, airports and four lane highways. It has almost full employment, with an unemployment rate of only 2.9%. According to officially published figures, EU membership fuelled a booming economy, increased outsourcing into the country, and boosted the tourism sector. The litas, the national currency, has been pegged to the Euro since February 2, 2002 at the rate of EUR 1.00 = LTL 3.4528, and Lithuania is expected to switch to the Euro on 1 January 2010. There is gradual but consistent shift towards knowledge based economy with special emphasis on biotechnology (industrial and diagnostic), because in Lithuania there are concentrated major biotech producers in the Baltic countries, as well as laser equipment.
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Like other countries in the region (Estonia, Latvia) Lithuania also has a flat tax rate rather than a progressive tax scheme. Lithuanian income levels still lag behind the rest of the older EU members, with per capita GDP in 2007 at 60% of the EU average. Lower wages may have been a factor that in 2004 influenced the trend of emigration to wealthier EU countries, something that has been made legally possible as a result of accession to the European Union. In 2006 income tax was reduced to 27% and a reduction to 24% was made in October of 2007. Income tax reduction and 19.1 % annual wage growth is starting to make an impact with some emigrants gradually beginning to come back. The latest official data show emigration in early 2006 to be 30% lower than the previous year, with 3,483 people leaving the country.