On Tuesday, Lithuanian President Gitanas Nausėda signed the 2021 budget bill into law.
“For four years before the pandemic, Lithuania had surplus public finances. The strong pre-crisis position now allows the country to help its health system, people and businesses withstand the challenges of the pandemic,” the president said in a press release.
“However, next year’s budget deficit of 7 percent of GDP must be a short-term phenomenon: temporary relief measures cannot become permanent expenditure,” he added.
The coronavirus relief package totals more than 1 billion euros, with funds earmarked for downtime compensation to businesses, allowances to self-employed people and job-seekers, financial support for hospitals and other institutions involved in combatting the pandemic, according to the press release.Nausėda also noted that the average monthly old-age pension is set to rise from 377 to 415 euros next year and described the planned increase in the universal child benefit as a positive development.
The 2021 budget was approved by the Seimas earlier in December.
Some opposition politicians say it was unreasonable to raise the deficit target, warning that the rapid debt growth could make government borrowing more expensive in the long run.
However, Prime Minister Ingrida Šimonytė previously said the new government adjusted the draft budget to better reflect the real situation, describing the widening of the deficit as short-lived and inevitable.