Sinkevičius flags deficit as biggest drawback in next year’s budget

Prime Minister Mindaugas Sinkevičius said the size of the deficit was the most disappointing feature of next year’s budget, while also voicing concern about the slow use of defence funds, LRT reported.

Speaking after meeting the Liberal Movement parliamentary group on Thursday morning, Sinkevičius said the government was considering ways to increase budget revenue and streamline administration. He said Lithuania’s economic outlook was influenced not only by domestic decisions and consumption but also by geopolitical events, including the wars in Ukraine and the Middle East.

Opposition leader Viktorija Čmilytė-Nielsen questioned whether the government was moving towards treating the defence allocation as less important because the money was not being spent quickly enough. She also asked about a new tax package that, she said, Social Democrat minister Valys had indicated was being discussed but could not yet be made public.

Sinkevičius said he was dissatisfied with the pace of defence spending. About half of the defence budget had been used by early autumn, despite an allocation equivalent to 5.38% of gross domestic product. He said the largest volume of payments was expected in the final quarter and that Defence Minister Robertas Kaunas had assured him the funds would be spent properly and effectively.

The prime minister said he wanted defence investment to be distributed more evenly throughout the year and was monitoring spending personally. He added that simply spending the money by year-end was not enough; it had to be used transparently and effectively. He expected the government to report that all the funds had been used by the end of the year, saying otherwise it could undermine the rationale for the size of the defence budget.

Sinkevičius also pointed to questions raised by the State Audit Office about the large number of purchasing organisations and whether procurement could be centralised.