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“We currently have a very risky and uncertain period associated with the coronavirus, so the most important thing is to take effective measures to help manage the situation quickly. We pay the utmost attention to this when planning changes to the draft budget, ”says Finance Minister Gintarė Skaistė.
After the first revision of the preliminary draft of the state budget for 2021, general government spending increased by about 1,237 million. of which the majority, that is, about 934 million. is intended to manage the effects of the coronavirus pandemic.
In addition, expenses are foreseen for the implementation of measures by the Ministry of Health, the Ministry of Economy and Innovation and the Ministry of Social Security and Labor to reduce the negative effects of the coronavirus pandemic.
Of the 934 million allocated to the management of the Covid-19 pandemic, more than half of the funds, that is, 480 million. In addition, it is intended to provide the Ministry of Social Security and Labor: sickness benefits (incapacity for work), subsidies during inactivity time, benefits for both the self-employed and those still looking for work.
The additional funds allocated to the Ministry of Economy and Innovation amount to 230 million. EUR, which will be used for grants, soft loans, partial interest compensation and other business support for companies affected by Covid-19.
It is planned to allocate 145 million LTL to the Ministry of Health. for the purchase of Covid-19 vaccine, treatment and medical equipment, laboratory tests, etc. There are also another 76 million in the government reserve. for the different institutions involved in the fight against the negative effects of the coronavirus pandemic.
The remaining part of the additional costs foreseen in the draft improved budget is around € 303 million. of which about 95 million. EUR is provided for additional indexation of pensions. The financing of the expenses of the Compulsory Medical Insurance Fund is guaranteed by the allocation of an additional 89 million LTL. of the state budget, which are destined to the reimbursement of medicines and medical premiums, etc. Additional funds will also be allocated for social assistance, increasing the salaries of cultural workers, social workers and civil servants.
Anticipating better 2020 revenue collection and faster growth of projected wage bill in 2021, 38.9 million. The part of the personal income tax allocated to the budgets of all municipalities of the income from this tax to the consolidated state budget and municipal budgets is increased by EUR. It is also estimated that 39.9 million. to offset changes in municipal spending.
Following the assumption made in autumn that the negative impact of the pandemic on the economy will intensify in the fourth quarter of this year, the Lithuanian economy is expected to contract by 1.5% this year due to the impact related to the pandemic of the Covid-19 virus.
As the epidemiological situation deteriorates in the fourth quarter of this year, the negative impact of the Covid-19 virus on the economy will be felt in the first quarter of 2021. quarter, and we expect an increase in economic activity from the second trimester. Thus, throughout 2021, the Lithuanian economy could grow by 2.8 percent, that is, 0.5 percent. points less than expected in September.
Evaluating the entirety of the improved bill and the improved budgets that make up the other government sector, the government’s revenue will be $ 682 million. less than in the initial draft budgets. The most important reason for the decrease is the 744 million expected. income and expenses, respectively, of the Economic Recovery and Resilience Service.
Meanwhile, revenues from the state budget, including the European Union and other international financial support, are declining by 132.8 million. euros. When evaluating the entirety of the improved bill and the improved budgets of other public administrations, the deficit of public administrations will amount to 7.0 percent. GDP (of which 1.8% of GDP due to spending related to measures to manage the consequences of the Covid-19 pandemic).
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