Lithuania’s public debt is expected to reach 42.6 percent of gross domestic product (GDP) this year and rise faster than previously forecast, surpassing half of GDP by 2028, the National Audit Office said Wednesday.
According to updated projections, government debt is set to climb to 53.8 percent of GDP by 2028, a level higher than assumed in Lithuania’s medium-term fiscal plan.
“If we want security – an increase in defence spending to 5 percent of GDP – while maintaining the accessibility and quality of public services, we must urgently create sustainable sources of revenue,” Auditor General Irena Segalovičienė said in a statement. “Otherwise, public debt will approach the risky 60 percent of GDP threshold for Lithuania.”
The Audit Office said its latest report to the Seimas found no significant distortions in government debt accounting. However, Segalovičienė cautioned against relying too heavily on borrowing, even if the Maastricht limit of 60 percent of GDP has not yet been reached.
“It is essential to strengthen the public finance system and ensure that debt management is based on clear rules, long-term objectives, and compliance with Maastricht criteria,” she said.
At the end of 2024, Lithuania’s general government debt stood at 29.99 billion euros, up 2.41 billion euros, or 8.7 percent, from a year earlier. The debt-to-GDP ratio rose by 0.9 percentage points to 38 percent, according to the institution.
The draft 2026 budget projects that government debt will reach 45.1 percent of GDP next year. The Maastricht criterion allows debt up to 60 percent of GDP.
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