2019.09.11 15:30

Lithuania will borrow to reach 2-percent defence spending benchmark

BNS2019.09.11 15:30

Lithuania's government plans to borrow to meet NATO's benchmark for 2 percent GDP defence spending, after improving GDP-growth forecast pushes defence spending below the 2-percent threshold.

Lithuania had already planned to meet the NATO defence spending benchmark, but "after GDP estimates were raised, we plan to use the planned mechanism to borrow to ensure the 2 percent NATO rate," Arnoldas Pikžirnis, an adviser to Lithuanian Prime Minister Saulius Skvernelis, told BNS on Wednesday.

Specific numbers will be known in the upcoming weeks, he added.

Lithuania's Finance Ministry has raised the country's yearly GDP-growth estimate from 2.6, to 3.7 percent.

The country's defence budget stands at 948 million euros this year. Based on the last year's GDP estimates, it would amount to 2.01 percent GDP. Yet the new GDP estimates have pushed defence spending below the two-percent benchmark.

Read more: PM Skvernelis vows more funds to bring defence spending to 2 percent GDP

A similar situation unfolded last year as well, and the Lithuanian government had to additionally allocate over 21.5 million euros for defence at the end of that year, but still failed to reach the 2 percent threshold.

Read more: Lithuanian MoD calls for increased defence spending, faster modernization of the military

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