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2015.10.01 10:16

Lithuania's 2016 budget is aimed at boosting consumption, finance minister says

DELFI.lt 2015.10.01 10:16

Lithuanian Finance Minister Rimantas Šadžius says that next year's budget has been drafted to give a boost to the country's slowing-down economy, noting planned increases in the minimum wage, in the non-taxable income tax threshold and in salaries for public sector employees will stimulate domestic consumption.

Lithuanian Finance Minister Rimantas Šadžius says that next year's budget has been drafted to give a boost to the country's slowing-down economy, noting planned increases in the minimum wage, in the non-taxable income tax threshold and in salaries for public sector employees will stimulate domestic consumption.

"Now that our economic growth has slowed down, the budget should somewhat stimulate the economy. The so-called fiscal consolidation is being put on hold for the year," the minister told reporters after the Cabinet's meeting on Wednesday.

"On the other hand, we have approved measures - starting with increasing the non-taxable personal income tax threshold and continuing with the raising of the minimum wage to 350 euros from January 1 - that will encourage consumption," he said.

Šadžius said that an increase in the salaries of some public sector employees in 2016 would also boost consumption, which has become the main engine of economic growth in the country.

The minister expects that the government's decision to allocate 70 million euros for paving gravel roads will also contribute to economic growth next year.

The Cabinet on Wednesday approved a preliminary draft 2016 state budget planned with 7.893 billion euros in revenue, down by 96 million euros, or 1.2 percent compared with this year, and 8.485 billion euros in expenditure, up by 88 million euros, or 1 percent.

This leaves a budget deficit of 592 million euros, up by 184 million euros, or 45.1 percent, compared with this year's estimated deficit of 408 million euros.