VILNIUS, April 5 (Xinhua) -- Political uncertainty and worsening demographic trends are the main issues negatively affecting expectations of foreign investors in Lithuania, a new study conducted by the country's Investors' Forum showed on Thursday.

According to the report, political tensions in the Lithuanian parliament, disadvantages of regulatory acts, labor taxation, the need to improve education system are among the problems listed out by foreign business executives as the most important challenges in the nearest future.

"Investor's optimism has been gradually rising, foreign companies plan new jobs, therefore, the authorities should prove that the state currently is stable, predictable and open to dialogue. Unfortunately, this is what is lacking the most," Rolandas Valiunas, chairman of the board at Investors' Forum was quoted as saying in a statement.

In his words, discussions about possible early elections, contradictory lawmaking initiatives rather than implementation of necessary reforms send "a wrong message" and constrain investors' willingness to expand activities in Lithuania.

Nevertheless, overall index of economic sentiments of the Lithuanian investors improved modestly in the beginning of 2018 compared to the end of the last year, to 1.23 points from 1.216 points the last quarter of 2017, the study said.

According to the study, 63 percent of respondents said that situation as regards political stability in Lithuania is "bad" or "moderate". Eighty-nine percent of respondents don't expect positive changes in this area in the nearest future, while 32% expect the political situation to worsen further.

According to the foreign investors questioned by Investors' Forum, the Lithuanian authorities should urgently upgrade the country's education system in order to improve business and investment climate.

Well developed telecommunications and transport infrastructure were repeatedly mentioned by foreign investors as the main advantages of Lithuania's business environment, the report reads.

Investors' Forum is a business association of the largest investors in the Lithuanian economy. Founded in June of 1999, Investors' Forum today has over 50 members.