Finance Ministry predicts large 2008 deficit

  • 2008-10-12
  • TBT Staff in cooperation with BNS

Prime Minister Kirkilas downplayed the news and said the deficit was not the government's fault. (Photo by Vytenis Petrosius)

VILNIUS 's TheLithuanian finance ministry has predicted that this year the country will havea deficit of 2.69 billion litas (779.13 million euros) 's amounting to 2.35percent of the GDP.

The prediction marks a significant change from thegovernment's previous goal of a 0.5 percent deficit. The ministry still leftroom for doubt, however, saying that the deficit could be smaller thanpredicted.

"This forecast may change depending on the collection ofbudgets and social funds and their expenditures," a statement from the ministrysaid.

The deficits of Social Security Fund and Mandatory Health Insurance Fundwould account for the largest chunk of overall deficit. As estimated late inSeptember, the expenditures of those two funds would exceed the revenues by1.112 billion litas this year.

The central government would run a deficit of 1.289 billion litas, and localauthorities a deficit of 287 million litas.

Despite these numbers, Prime Minister Gediminas Kirkilas said that blame forthe increased deficit should not be placed at the government's feet.

"It was not Lithuania's government to ruinthe banks. The banks and finance institutions collapsed due to other reasons -first, irresponsible bankers, second, lax control and regulation of financeinstitutions. I have no doubts that the next EU Summit will adopt a decision onregulation," Kirkilas told the reporters

The prime minister also downplayed the significance of theincreased deficit, saying that the new figures are not "dramatic."

"The deficit of 2.3 percent, which is being planned by Lithuania,is not dramatic at all. As we know, we should not cross the limit of 3 percent.With economic growth slowing down, we have to take decisions and protect thesocial welfare of our people in the first place, retain the growth of theirwages, and not just stick to various criteria," he said.