Lithuania’s budget deficit will reach 4.9% of gross domestic product (GDP) this year instead of the previously projected 3.3%, Finance Minister Gintare Skaiste has said.
“Considering the revisions and additional expenditure, the budget deficit this year might reach 4.9% of GDP, which will also be due to the increased financing of national defense that has already been decided,” Skaiste told a press conference on April 12.
General government debt might reach 43.3% of GDP in 2022, she said.
General government revenue will increase by 734 million euros this year while expenditure would grow by 811.1 million euros. Total budget revenue, including EU funds, will reach 15.1 billion euros and expenditure – 17.4 billion euros.
According to the revised budget of the State Social Insurance Fund (Sodra), the fund’s revenue will increase by 145.8 million euros this year, to nearly 6 billion euros, whereas its expenditure will grow by 114.6 million euros, to 5.6 billion euros.
“Expenditure is being increased by 114.6 million euros, which includes both the increasing pensions and revisions to certain benefits,” the finance minister said.
Municipal budget revenue planned for 2022 has been revised up by 90.1 million euros, to 4.5 billion euros, while expenditure has been increased by 98.1 million euros, to 4.5 billion euros.
According to Skaiste, the budget was revised for three reasons – to mitigate the consequences of inflation and strengthen energy independence, to provide aid to war refugees and to maintain critical national infrastructure and security.
The revised budget earmarks 976 million euros for mitigating the consequences of inflation and strengthening energy independence.
As Russia’s actions have led to a drastic surge in energy prices, the government has proposed to set aside 570 million euros for partial compensation of gas and electricity costs incurred by the country’s households.
The Finance Ministry also proposed allocating 370 million euros for Ukrainian war refugees in the revised state budget, Skaiste said, adding that the bulk of those funds – 292 million euros – would be earmarked for social security.
“Today, we already have about 40,000 Ukrainians. Obviously, we need to earmark financing to be able to take care of them and ensure adequate quality of life,” the finance minister said.
According to her, some of the proposed funds would be obtained from the government reserve, while the rest might be borrowed should the number of war refugees continues to increase.
The revised budget submitted by the finance ministry will on Wednesday be discussed by the government and later by the Lithuanian parliament. (LRT/Business World Magazine)