Nausėda defends projected deficit as defense system struggles to spend funds
Friday 9th October 2026 on 08:45 in
Lithuania
Lithuanian President Gitanas Nausėda said he was not concerned that next year’s public-sector deficit could reach about 3.8 percent of GDP, arguing that it reflects defense needs while other priorities, including pension increases, are being maintained. He made the remarks in an interview published by 15min on Friday, LRT reported.
The projected deficit exceeds the 3 percent limit set by the Maastricht criteria. Nausėda said Lithuania would have sufficient grounds to explain the overshoot to the European Commission, which he said takes a more flexible approach to countries on NATO’s eastern flank facing higher defense costs.
Next year’s budget is projected to include 22.04 billion euros in revenue, including EU support, and 27.85 billion euros in spending. Nausėda said the deficit was entirely linked to the priority given to national defense, but added that the government was not sacrificing all other goals.
He responded to criticism from former prime minister Ingrida Šimonytė and Liberal Movement leader Viktorija Čmilytė-Nielsen, who said the projected deficit raised concerns about the government’s approach to long-term public finances. Nausėda said the defense budget under Šimonytė’s government was 3 percent of GDP, two percentage points below the current plan. Had the current government allocated the same share to defense, he said, the deficit would have been 1.8 percent.
The president also welcomed planned pension increases, saying pensions were approaching levels seen in Western Europe. The budget allocates 715 million euros for pension rises. From January, the average old-age pension is expected to increase by about 10.4 percent, or 78 euros, to 825 euros. For people with the required work record, it is forecast to rise by 10.9 percent, or 88 euros, to 895 euros. Individual increases will vary.
Defense system struggling to use allocated funds
Nausėda said the defense system was struggling to use the funds allocated to it, citing lengthy project timelines and a lack of flexibility among state institutions to learn and cooperate with Ukraine. He said the Ministry of National Defence and the military had so far used less than half of this year’s defense allocation.
Lithuania’s 2026 defense budget stands at 4.8 billion euros, or 5.38 percent of GDP. Nausėda said projects could not be allowed to take two to two and a half years from conception to implementation.