Monetary payments to hard-pressed households, proposed by President Gitanas Nauseda in response to rising prices, may exacerbate inflation even further, according to Finance Minister Gintare Skaiste.
“Such helicopter money could, in principle, make the inflationary mill spin even faster,” she said on February 8. “One should be very cautious about such measures, and I’d say that it’s to early to propose such a measure.”
Additional support measures may not be needed if prices stabilize and inflation peaks in February, as expected, according to the minister.
“If we see that the situation is improving, then additional measures may not be needed, but if, God forbid, something happens in Ukraine, the energy market will react painfully. We just have to keep a close eye on what is going on,” she said.
Last week, President Nauseda proposed to give 100-euro payments to low-income households to help them cope with growing prices, particularly energy bills.
The president also suggests raising the non-taxable personal income threshold to 510 euros from the current 460 euros. (LRT/Business World Magazine)