Although the 2015 state budget was drafted expecting a 3.4-percent gross domestic product (GDP) growth, in March the Ministry of Finance reduced 2015 growth forecast to 2.5 percent, while the Bank of Lithuania, to 2.7 percent. The International Monetary Fund also revised Lithuania’s GDP growth in April and reduced it to 2.8 percent. According to DNB analysts, the country’s GDP in 2015 should grow 2.5 percent.
“In my eyes, either the budget will be revised or the state will have to finance the deficit by borrowing,” said the analyst.
According to her, currently conditions for the country to borrow are very favourable due to the quantitative easing programme implemented by the European Central Bank. However, Genytė-Pikčienė says that when it comes to finances of such a small and open economy as Lithuania, the government should strive for a fully balanced budget. The central government deficit in January-February 2015 totalled EUR 241.2 million and year-on-year was lower by EUR 41.2 million.
Minister of Finance Rimantas Šadžius said in late March that in spite of the reduced economic growth forecast there were no objective reasons to revise the budget. He added that the economic growth rate is not directly related to budget revenue. According to the minister, the first two months of 2015 did not show negative tendencies as 99.8 percent of the projected national budget revenue was collected.
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