Lithuania's State Debt is Manageable, Assures Designate Finance Minister

Lithuania's state debt is under control, according to T. Valys, the designate Finance Minister, who addressed concerns within the Seimas conservative faction on Wednesday.

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The situation (regarding the level of state debt – ELTA) is truly manageable, of course. (...) Debt is also not a constant; it reacts to circumstances.

While the State Audit Office (VK) projects that the government sector debt will rise from 45% to 55.3% of GDP between 2026 and 2029, with interest expenses increasing from 1.1 to 1.8 billion euros, Valys assured that the debt level will be managed. He stressed the commitment to maintaining the country's economic growth pace.

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Regarding debt management – without a doubt, we will maintain this priority, (...) there are certainly no special revolutions or changes being proposed. (...) On the other hand, you yourselves understand that any growth, any ambition requires all possible means.

"Regarding debt management – without a doubt, we will maintain this priority," Valys stated, adding that no significant revolutions or changes are anticipated. He acknowledged that growth and ambition require resources but promised responsible management of state debt processes. This, he believes, will allow Lithuania to balance its vision of regional leadership in economic resilience and maintain its defense funding ambitions, which are crucial for its regional standing and competitiveness.

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But I assure you that by responsibly (...) managing state debt processes, it is possible to balance our ambitious vision of remaining regional leaders (...) in economic resilience, including maintaining the ambition for existing defense financing, which is very important to us, and which constitutes our distinctiveness and competitiveness in the region.

Valys also affirmed adherence to fiscal discipline rules, stating he is not in favor of a larger budget deficit. He argued that any additional borrowing must be justified. Addressing concerns about Lithuania's credit rating, he noted that even the U.S. experienced a rating downgrade, emphasizing that financial reliability is a strategic asset that must be protected. He concluded by urging against alarming rhetoric about potential non-compliance with fiscal discipline, stressing the need for a balanced fiscal policy that supports, rather than hinders, regional development and economic growth.

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The deficit, every additional borrowing must be justified. Lithuania's (borrowing – ELTA) rating, (...) there are concerns that it has fallen, but the fact that the rating of the U.S. itself also decreased, not just several companies, (...) financial reliability is a strategic asset. We will protect this. And finally, defense financing (...) must be supported by fiscal norms.