Analytics, Budget, Economics, Financial Services, GDP, Lithuania

The ministry projected in late June that the country's economy would contract 7% due to the coronavirus-induced crisis, and was expected to grow 5.9% next year.

In April, the ministry said Lithuania's GDP would drop 7.3% this year and go up by 6.6% in 2021.

As part of public expenditure will be financed with borrowed funds next year since economic recovery will take time, therefore, Lithuania's budget will have a deficit, Finance Minister Vilius Sapoka said in a interview with the 15min.lt news website.

"The deficit will be within common sense limits for the debt to BVP ratio to be able to change the trajectory towards a downward tendency as soon as possible," he said.

According to the minister, any further increase in expenditure next year should be well-weighted and should only involve the most vulnerable groups. Therefore, any unnecessary expenses should be halted and funds for investment into the future and innovation should be planned.

Ramunas Karbauskis, leader of the ruling Lithuanian Farmers and Greens Union, told journalists last week that next year's budget would be in surplus and socially-oriented. Meanwhile, Prime Minister Saulius Skvernelis said earlier the 2021 budget would be safe, responsible and socially-oriented.

Based on the government's program on Lithuania's stability in 2020, approved in April, the general government deficit should range from 2.4 to 3.9% in 2021 and the general government debt should range from 47.9 to 52.7% GDP.

Draft state, municipal, social insurance and mandatory health insurance fund budgets will be put before the outgoing parliament but the final decisions would be made by the newly-elected parliament already.