Lithuanian Deficit Forecasts
Lithuania faces a general government budget deficit reaching 3.8% of gross domestic product next year, according to parliamentary faction members of the opposition conservative party Homeland Union-Lithuanian Christian Democrats, Diena reported.
The state could see its deficit average roughly 6% of gross domestic product annually between 2030 and 2035, Diena reported.
“The long-term assessment shows that the overall public financial situation has worsened and debt could potentially exceed 60% of GDP as early as 2030 and grow to more than 74% by 2035,” Rukšėnaite said.
“The long-term assessment shows that without additional fiscal decisions, the state’s financial situation will not improve by itself, and the deficit will remain at around 6%,” she added.
Required Fiscal Measures
Additional steps involving both state spending and revenue are needed to comply with fiscal discipline rules, Rukšėnaite told Diena.
Minister of Finance Taurims Valis stated on Wednesday that returning to standard fiscal discipline could take approximately five to seven years. Meanwhile, Bank of Lithuania Governor Gediminas Šimkus stated on Wednesday that the national debt will exceed the 60% threshold outlined in the Maastricht criteria faster than projections issued by the European Commission, which expects debt levels to surpass that mark in 2036.
The state budget draft backed by the Lithuanian government sets next year’s general government debt at 48.2% of gross domestic product, remaining below the 60% Maastricht criterion.
Answering budget deficit questions
What is the projected general government budget deficit for next year?
The general government budget deficit is projected to reach 3.8% of gross domestic product next year, according to parliamentary faction members of the opposition conservative party Homeland Union-Lithuanian Christian Democrats.
When does the European Commission expect Lithuanian debt to cross Maastricht criteria?
The European Commission estimates that Lithuania’s public debt could exceed the 60% threshold in 2036, though the central bank governor stated the threshold will be breached faster.
What debt level does the government’s budget draft project for next year?
The government-backed state budget draft for next year sets the general government debt at 48.2% of gross domestic product.