Lithuanian PM says economic growth and savings will fund government goals

Lithuania’s economic growth, though slower than previously forecast, will help fund the government’s ambitious plans, Prime Minister Mindaugas Sinkevičius said in an interview with TV3 on Thursday, as reported by LRT and ELTA.

While the government had initially expected GDP growth of 3%, current projections suggest 2.7% or 2.8%. Sinkevičius stated that this growth would still allow for increases in pension indexing, though achieving faster pension growth may require reviewing and cutting unnecessary or questionable spending.

He acknowledged that preparing a balanced budget for next year would be one of the biggest challenges for the new government, given strict security commitments and limited time. “A balanced budget draft for next year will be one of the biggest tasks, and time is short—October and November will be critical months,” Sinkevičius said.

He emphasised the need for a balanced approach, particularly regarding defence spending, which must remain at least 5% of GDP. Lithuania’s current defence budget allocates 5.38% of GDP, or €4.79 billion.

The new government, formed under Sinkevičius of the Lithuanian Social Democratic Party (LSDP), held its first cabinet meeting on Wednesday. The government officially assumed office on Tuesday after the Seimas approved its programme and swore in the prime minister and cabinet members.