Press release, 21 October 2014
Rimantas Šadžius, Minister of Finance, submitted to the Seimas the draft Law No XIIP-2381 on the Approval of the Financial Indicators of the State Budget and Municipal Budgets for 2015 that provides for nearly EUR 8 billion of budget revenues and nearly EUR 8.3 billion of appropriations for expenditure and acquisitions (appropriations exceed revenues by more than EUR 342 million).
“This has happened because the state budget will cover a large proportion of expenditure previously financed by Sodra, namely, EUR 52 million for compensation for state social insurance old-age pensions, pensions for loss of working capacity, and pensions reduced during the economic downturn; EUR 21 million for running the Labour Exchange; and payment of all interest on the funds borrowed by the State Social Insurance Fund from 2014 onwards,” said Mr Šadžius.
The Minister of Finance made no secret of the difficult economic situation: “The most recent reports of Statistics Lithuania say that business and consumer expectations remain pessimistic. The data on imports of capital goods for industrial production sends a signal of possible adverse trends, but let’s not hurry to draw conclusions from the interim data relating to one or two months. If it appears in the short term that growth is slower than expected, we will correct macroeconomic projections respectively and we will do it during the budgeting process.”
According to Mr Šadžius, the Government provided for concrete steps and measures to reduce the risks of an economic slowdown, including membership of the euro area, improved access to financial resources for small and medium-sized businesses, and responsible national fiscal policy.
Presenting the draft budget for the next year, the Minister identified funding priorities: increasing national security, promoting of economic growth, complying with social obligations, financing of health care, and increasing of municipal financial independence.
Speaking about the spending projected, the Minister noted that around EUR 13 million were saved on management costs and debt service costs were gradually decreasing. In the next year’s budget, education will account for the largest share of expenditure making up EUR 1.1 billion. Defence appropriations will be raised by EUR 114 million. (Total appropriations for the Ministry of National Defence will exceed EUR 424.5 million)
“This is a very large amount but it is justified. The national defence budget alone will reach 1.11 per cent of gross domestic product (GDP). However, defence spending also includes other costs, mainly incurred by the Ministry of the Interior. Therefore, all amounts added, we put the total figure for defence spending even at 1.35 per cent of GDP in 2015,” the Minister highlighted.
After the submission of the state budget, it will be considered in accordance with the procedure established by the Statute of the Seimas. The draft Law will be considered by the Committee on Budget and Finance (lead committee) and all other Seimas committees (additional committees). The preliminary arrangement is that the Seimas will have the first reading on 25 November 2014 and the second reading on 2 December 2014.
Saulė Eglė Trembo, Public Relations Unit, Communications Department, Office of the Seimas, tel. +370 5 239 6203, e-mail: egle.trembo@lrs.lt
