Status and perspectives of lattice QCD

Lattice QCD aims at solving QCD from first principles. This is a difficult task. In this talk I will discuss recent progress along this line, focusing on the more fundamental problems, A big step forward has been the identifi cation of improved actions and operators which reduce the discretization er rors to O(a(2)). Now the limitations of the quenched approximation are clea rly becoming visible. Major progress has also been made in the consistent e valuation of hadron matrix elements, including higher twist effects and eva ding renormalon ambiguities.