Company debts are decreasing, but account freezes send a different signal

Lithuania's corporate debt indicators show an improving payment discipline, with total tax debt decreasing by 0.4% from February to June. This contrasts with a 0.7% rise during the same period in 2025. While a temporary spike of about 3.2% was recorded in March compared to February, the debt volume had decreased again by June. The number of companies with tax arrears continues to grow, but the pace of this increase has slowed considerably in the spring.

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Looking at total debt amounts alone, payment discipline has even improved this spring. Debts decreased faster than seasonally usual, and the number of companies indebted to 'Sodra' has decreased. Therefore, the indicators are not typical of an emerging economic downturn.

"Looking at total debt amounts alone, payment discipline has even improved this spring," said Vaidas Žagūnis, a board member at Citadele Bank and head of Business Banking for the Baltics. "Debts decreased faster than seasonally usual, and the number of companies indebted to 'Sodra' [Social Insurance Fund Board] has decreased. Therefore, the indicators are not typical of an emerging economic downturn." Data from 'Sodra' supports this, showing a 10.5% drop in social insurance debt from February to June, faster than the 7.4% decrease last year, with the proportion of indebted companies shrinking from 12.8% to 11.5%.

However, a different picture emerges when examining frozen bank accounts. Artūras Potelis, head of the commercial department at Creditinfo Lietuva, explained that while debt can often be rescheduled, account freezes mean funds are actively seized, directly impacting a company's ability to pay salaries and suppliers. "It is important to assess not only the debt size but also the number of account freezes and the amount of frozen funds," Potelis stated. "Debt shows a financial obligation, while freezes signal a stricter collection or restriction."

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It is important to assess not only the debt size but also the number of account freezes and the amount of frozen funds. Debt shows a financial obligation, while freezes signal a stricter collection or restriction.

While corporate debt recorded in the credit bureau system decreased by 19.1% from February to June, significantly more than the 6.4% decrease last year, the amount of frozen funds moved in the opposite direction, increasing by 1.3% this spring. The number of freezes remained largely unchanged, contrary to the usual seasonal decrease. Currently, 5,136 companies have frozen accounts, a 1.5% increase since February, with the average frozen amount per company rising to approximately 70,600 euros. "All four freeze indicators moved in the same direction simultaneously," noted Žagūnis. "The changes are not large, ranging from one to three percent, but their consistency is key. It is precisely the collection indicators that show where financial difficulties are moving from potential risk to being tangibly felt."

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All four freeze indicators moved in the same direction simultaneously. The changes are not large, ranging from one to three percent, but their consistency is key. It is precisely the collection indicators that show where financial difficulties are moving from potential risk to being tangibly felt.