Lithuania’s new cabinet of Prime Minister Gintautas Paluckas on Friday approved an updated version of next year’s budget, originally drafted by the previous government, increasing actual spending by almost 42 million euros.
The additional funds will go toward paving gravel roads, supporting informal education programs, and bolstering national security.
The draft state budget for 2025 will now be submitted to the parliament, which is expected to vote on it next Thursday.
Finance Minister Rimantas Šadžius said that Lithuania maintains a budget deficit of 3 percent of GDP, staying “at the edge of fiscal discipline”.
“The European Commission sees risks. Without additional measures in 2025 to adjust public sector revenue, our national debt would become unsustainable,” Šadžius told the cabinet. “This means there’s a risk that it would exceed the Maastricht criterion quite soon.”
In addition, the defence borrowing limit is set to be increased by 800 million euros.
“The needs are immense for various purposes, including making advance payments for difficult-to-procure equipment or future investment projects. These advances require financial resources that can only be borrowed,” Šadžius said.
According to the minister, Lithuania’s public debt should reach 44 percent of GDP by the end of 2025. Lithuania will be able to borrow up to almost 6 billion euros next year, he said.
The public debt previously envisaged in the 2025 budget bill amounted to 43.2 percent of GDP, 3.8 percentage points higher than this year.
The borrowing limit is being increased to 5.953 billion euros, from 5.035 billion euros.
According to Šadzius, the increase is based on improved economic forecasts for Lithuania published by the European Commission in the fall.
“They allow us to plan more confidently for the borrowing limit, which has been significantly increased to ensure advance financing, for instance, for the defence ministry,” the minister said.
Next year’s amended draft budget earmarks an additional 20 million euros for paving gravel roads and 7.3 million euros for security services, including 6 million euros specifically for the State Security Department.
The government also proposes allowing borrowing for transit roads of national significance, bypasses, bridges, and viaducts, as well as for social needs.
The new ruling bloc is making only minimal adjustments to the 2025 budget now, with plans to revise it next year.
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