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“The fact is that the formation of the budget for next year will definitely not be easy, because already this year, as far as we know from public information, the budget is lagging behind the plan in terms of revenue.
This is quite natural in relation to the activated aid measures: tax loans, deferral of Sodra contributions. The revenue share will be very tight, “he told reporters at a remote conference on Friday.
V. Vasiliauskas said that until the draft budget is ready, it is difficult to evaluate it.
“We will give our opinion on him in October,” he said. – In my opinion, it is very important that the extra money that will come to European level (I am referring to the Recovery Fund) is used selectively, creating the conditions for the future. T. and. not for current needs but to create potential. Only economic development in the future will help us manage today’s naturally high public debt. “
The central bank director also expected that all state expenditures would be included in the budget proposal.
“Unlike today, when support in the context of Covid-19 is beyond budget. That shouldn’t be the case, in my personal opinion, ”he said.
Better than expected
The Governing Council of the European Central Bank, meeting on Thursday, did not change interest rates or the scope of the quantitative easing program, as expected.
In response to the European Union economic support package approved in June, the ECB improved its forecast for euro area GDP growth from -8.7% to -8.0% in 2020, while inflation remained unchanged unchanged for 2020 (expected to increase prices by 0.3%) and increased from 0.8 to 1.0 percent by the 2021s.
V. Vasiliauskas commented that we are currently in the waiting stage.
“There is a lot of uncertainty in the future, and the most important risk and factor is related to the vaccine, its appearance. On the other hand, economies are gradually adapting, people’s behavior is adapting. It’s also about better-than-expected results.
As for the fiscal stimulus, it is not yet clear how it will affect. The biggest impact will be next year. When it comes to debt, the general idea is that we are moving forward and we hope to have more clarity, “he said.
V. Vasiliauskas summarized that the current general mood regarding economic growth is “better than expected”.
The Bank of Lithuania will present its latest economic forecasts on September 28. V. Vasiliauskas stated that the expected indicators should be more positive than before.
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