Country Report Lithuania
- ID: 2138679
- April 2016
- Region: Lithuania
- 25 Pages
- The Economist Intelligence Unit
The general government budget deficit came to EUR78m at end-2015, equivalent to 0.2% of GDP, according to Eurostat. This marked a contraction from 0.7% of GDP in 2014. Public debt, in contrast, expanded to EUR15.9bn, equivalent to 42.7% of GDP, up by 2 percentage points from 2014. We expect a wider deficit and smaller debt in 2016 compared with 2015.
The contraction in the budget deficit in 2015 came despite a small increase in government expenditure as a share of GDP for the first time since the global financial crisis, from 34.8% of GDP in 2014 (down from 44.4% in 2009) to 35.1%. However, this was outstripped by the rise in revenue, from 34.1% of GDP in 2014 to 34.9%. The Ministry of Finance has yet to publish a full breakdown of the data, but it seems likely that the pick-up last year in private consumption growth (by 0.8 percentage points, to 4.9%) and government consumption growth (by 0.7 percentage points, to 2%) will have contributed to higher receipts from income tax, profit tax and value-added tax (VAT).
The finance ministry commented that the increase in the public debt was a short-term matter reflecting the accumulation of funds to redeem previously issued government bonds.