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“If we pass such a budget, there is a high probability that we will distinguish the EU as one of the countries with an above-average budget deficit, which would be strange, because the Lithuanian economy is one of the least affected by the crisis of the coronavir, “said the economist at Delfi Day.
“If we have the 5 percent budget deficit, we will stand out in a bad way, and in forming the 2022 budget, we may have to inevitably cut or increase taxes,” warns Ž. Mauricas.
Elta, he said, higher budget spending could pose problems for the country’s economic sustainability.
“We have a budget spending crisis because spending has grown significantly faster than it should. Enough appetite to raise a lot of benefits, pensions and the like next year. The gap between income and expenses can be quite significant, despite rapid growth. This may again raise certain questions for both international investors and credit rating agencies, “said Eltai Mauricas, adding that all this could lead to cost cuts in the future.
“All the increased attention could lead to talk of belt-tightening starting in the fall of next year, perhaps not to say without intimidating people, but raising certain taxes or freezing certain benefits or even worst-case scenario , give up”. That clue is wise. Greece had also cleared that path, ”Ž said. Mauricas.
“These languages can lead to certain roller coasters. Next year we will live very well at the expense of the future, but in 2022 that growth will not be so sweet,” admitted the economist.
According to him, it is necessary to consider whether it is really necessary to increase profits, and the DNA of the Future Economy plan also raises questions.
“It must be reconsidered whether it is really worth investing so urgently and so much in stimulating the economy,” says Ž. Mauricas.
“When it comes to increasing pensions, children’s money and public sector wages, it is better to increase a little less next year and maybe even more over the course of the year than to increase it too much and fear a cut later.” , He said.
Increase in the minimum wage, Ž. Maurico said it could help encourage more people to enter the labor market and reduce emigration, but said growth should not be too high and that part of the burden could be borne by the state.
Most importantly, according to Ž. Maurico, when drawing up the budget for next year to avoid unnecessary expenses or postpone them at least until the summer, when the situation clears up – the child’s money could grow from the first of July, the growth of pensions could also be delayed for part of the population.
“The main source of our budget deficit is the increase in benefits and not only the necessary ones, but also the additional ones: 200 euros in benefits for pensioners, another money laundering, generous promises to increase benefits next year,” says the economist.
“This is not the right way in a crisis situation, because we can reduce our growth potential. If we do, we will have a wave of emigration, a decrease in investment in the private sector, and it will be more difficult to get out of the crisis” he adds.
Speaking of the proposed pension number 13, Ž. Maurice says they shouldn’t be paid anything.
“It just came to our attention then. This is a one-time payment that erodes the entire Sodra system. What does it depend on? On the will of the politicians. I think this would undermine trust in both Sodra and the state and further increase the deficit. Now is definitely not the time to make additional commitments when the situation is still unclear, “says Luminor’s chief economist at Delfi Day.
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