Analytics, Budget, Financial Services, Lithuania

According to the finance minister, a fiscal deficit of the country should comprise 2.1% of the gross domestic product (GDP) this year. In 2010, it should decrease to 1% of the GDP and in 2011 – "we should reach a balanced budget", reports ELTA.

"The fiscal consolidation in 2010 and 2011 will require additional fiscal measures, structural reforms, which we are intensely discussing now, and which are foreseen in the Government"s programme," Semeta said.

Meanwhile, according to the forecasts of the European Commission, the fiscal deficit of Lithuania will stand at 3% of the GDP in 2010. According to the finance minister, the Commission assumed that the said deficit would be reached if Lithuania did not implement any structural reforms. Prime Minister Andrius Kubilius noted that "we see a light at the end of the tunnel", since we will have a 4-% growth in 2011 and approach the criterion of Maastricht. It is necessary to meet it in order to adopt the euro.

The Government approved the programme of the Lithuanian convergence in 2008, which is the main Government"s document defining the guidelines for the fiscal policy of an average period. The most important strategic task for the policy for an average period is the stopping of the economy"s slump and essential improvement in areas capable of boosting the economy. The implementation of the foreseen measures would create a basis for the growth of the GDP in 2011 and balance of public finances. The convergence programme was updated partially considering the evaluation of the Lithuanian convergence programme for 2007 made by the European Commission and the opinion of the Economy and Finance Ministerial Council based on the Commission"s evaluation.

Due to the economic downturn, it was decided to abandon plans to seek better indicators of the budget for 2009 and later years, but to follow the urges to restrict the increase in spending, reduce the impact of inflation and set the payment for work with regard to the general growth of performance.