The Lithuanian government on October 16 approved the Finance Ministry’s draft budget for 2026, which included a significant increase in spending and a record allocation for defence, before submitting it to the Seimas, the parliament, for debate.
Finance Minister Kristupas Vaitiekunas said Lithuania’s strong revenue growth this year allowed the government to boost expenditures while maintaining fiscal discipline.
“We are seeing rapid growth in revenues across all budgets, which enables us to increase certain expenditures and ensure consistent national development and defence financing,” Vaitiekunas told a Cabinet meeting.
Under the proposal, the general government deficit is projected to reach 2.7% of GDP next year, while public debt is expected to rise to 45.1% of GDP in 2026.
The draft budget earmarks EUR 4.79 billion for defence, equal to 5.38% of GDP, reflecting Lithuania’s commitment to strengthening its military amid regional security threats.
Total state budget revenues, including European Union funds, are forecast to reach EUR 21 billion, a 16.8% increase from this year, while expenditures are projected at EUR 27.5 billion, up 18.9%. Net government spending is set to grow 5.2%.
Recently approved tax changes are expected to generate an additional EUR 278.5 million in state revenue in 2026.
Vaitiekunas said the key priorities were social needs, defence, infrastructure, and maintaining fiscal sustainability.
“Next year we can afford relatively rapid wage increases while also meeting the major challenge of generously funding our defence,” he said.
The budget includes EUR 438.4 million in additional funding for public sector wage increases.
Teachers, higher education staff, and sports coaches will receive EUR 148.8 million in raises.
Medical workers will get an additional EUR 148 million.
Uniformed officers – including firefighters, police, prison, probation, and customs staff – will receive EUR 24.1 million more.
Cultural and arts sector employees will get EUR 12 million in added funding.
The minimum monthly wage will rise by EUR 115, or 11.1%, to EUR 1,153 before tax.
The average old-age pension will increase by 12%, reaching EUR 750, and EUR 810 for those with full contribution histories.
“This will affect more than one-fifth of our country’s population,” Vaitiekunas said.
Various social benefits, including child payments, will grow on average by 5.4%.
The government plans to allocate EUR 815.5 million for road projects, slightly more than this year, with additional borrowing possible to support infrastructure investments.
Municipal revenues are projected to grow by 10.4%, exceeding EUR 7 billion.
The government typically submits the budget to parliament until October 17, with final approval expected in December. (LRT)