ENIssues concerning the competitiveness of national economies are very important and multifaceted area of inquiry, undertaken by many researchers and international institutions. Scientific achievements in defining and determining a set of determinants of this phenomenon are constantly being completed and enriched. The purpose of this paper is to present the range, the conditions for formation and the effects of the shadow economy in Lithuania in the context I of its impact on the competitiveness of the economy. The paper presents results of research on shadow economy carried out by F. Schneider and Lithuanian Free Market Institute, as well as the source data for the macroeconomic situation of Lithuania in the period 2003-2012.