Draft 2024 State budgetary plan submitted to the Seimas
On 10 October, the draft 2024 State budgetary plan, which focuses on the implementation of the Agreement on Education and the three priority areas consistently identified by the Ministry of Finance: increasing personal income, strengthening security and investing in Lithuania's future, was submitted to the Seimas.
"After the upheavals of the last few years, this 2024 State budget will allow people to really feel the growth of the national economy. During this term, we consistently identified the same priorities every year: the growth of personal income, the promotion of investments creating high added value, and the strengthening of national security. We have not got distracted and it is bearing fruit, for example, the financing of national defence increased from EUR 1 billion to EUR 2 billion during the term, wages and pensions of public sector employees increased significantly. These numbers not only show our strong commitment to grow and strengthen Lithuania, but also ensure the growth of welfare of people," noted Minister of Finance Gintarė Skaistė.
Implementation of the Agreement onEducation
The draft next year's State budgetary plan prepared by the Ministry of Finance identifies the implementation of the Agreement on Education jointly signed by the political parties as a relevant priority. The Government maintains its commitments to the education community, therefore in the 2024 State budget, funding for education is increased by 14%, with an additional allocation of over EUR 387 million. The lion's share of this amount of over EUR 219 million will be allocated to increasing the salaries of teachers and pedagogical workers, EUR 84 million – to the salaries of lecturers, researchers and non-academic employees. Another EUR 25 million will be allocated to the preparation for lessons to general education teachers, almost EUR 14 million – for increasing the number of full-time non-contact hours of pre-school and pre-primary education teachers, almost EUR 8 million – for inclusive education, the positions of educational support specialists and for the integration of students with special educational needs, as well as almost EUR 8 million – for professional information and consulting and additionally over EUR 7 million – for additional lessons.
Over EUR 48 million is additionally allocated for research and experimental development (R&D), of which almost EUR 27 million is earmarked for salary increases, the remaining EUR 21.5 million – for research, while the total amount allocated to R&D will exceed EUR 345 million.
Directly due to the decisions made by this Government, according to the data published by the SDA, next year the net salary for teachers will increase by an average of EUR 276, of which EUR 130 – from 1 January, for lecturers and researchers, respectively, the salary will increase by EUR 440 next year, of which EUR 140 – from 1 January. Systematic salary increases in the education sector in this term show a significant result: compared to 2020, next year teachers' salaries will increase by EUR 676, lecturers' and researchers' salaries will increase by EUR 804. In percentage terms: since 2020, teachers’ salaries will have grown by 66 %, lecturers – by 70 %.
Personal income increase
The draft 2024 budgetary plan continues to consistently follow the direction of the Government of increasing personal income by allocating more than EUR 1.7 billion for this purpose. Over EUR 1 billion of this amount will be allocated to increasing the income of the employed.
The decisions on increasing the minimum monthly wages (MMW) by 10 % from EUR 840 to EUR 924 and increasing the non-taxable amount of income (NTA) by 20 % from EUR 625 to EUR 747 will mean an additional income growth by EUR 75.22 for the lowest income earners and will affect those earning up to one average wages (AW). In Lithuania, 811 thousand persons earn up to one AW. Comparing the growth of MMW and NTA since 2020 and the influence of the latter on net personal income, it will increase by EUR 261 for the lowest income earners.
At the same time, more than EUR 688 million is planned for increasing the salaries of employees of cultural and art institutions, municipal firefighters, doctors, prosecutors, statutory officers, social security and labour, judges, and other officials.
The draft State budgetary plan foresees over EUR 211 million for indexing and increasing the basic amounts of social assistance payments. These funds will be allocated to children's benefits, support for the disabled, compensation for housing heating costs, benefit pensions, targeted compensation for nursing and care costs. Decisions to increase benefits for children (child money) alone will affect 517 thousand children. In addition to these funds, EUR 55 million is planned for social services.
In the draft budgetary plan, EUR 519 million is planned for the increase of old-age pensions by slightly more than 12 %, which will mean an average monthly increase of EUR 70 for seniors with the required length of service (the pension increases from EUR 575 to EUR 644), and compared to 2020, the net amount increases by 61 % or EUR 244. This decision will affect over 623 thousand persons.
Strengthening security
Consistently implementing the agreement of the parliamentary parties and Lithuania's obligations related to NATO membership, the draft State budgetary plan prepared by the Ministry of Finance is committed to ensuring equal funding, by further strengthening national defence capabilities and military mobility. Increasing funding for the Ministry of National Defence has been targeted since the beginning of the term, it will be twice as large next year and will exceed EUR 2 billion, and it will account for 2.71 % of Lithuania's gross domestic product (GDP).
In the next year’s draft budgetary plan, EUR 392 million is provided for strengthening security, EUR 59.8 million of which is additional appropriation for national defence. EUR 280 million is allocated for military mobility and military infrastructure from the Temporary Solidarity Contribution, almost EUR 3 million is earmarked for arming the Public Security Service (PSS), another EUR 19 million – for cyber security, and over 30 million – for strengthening for the preparation for a possible accidentat Astravas NPP.
Investments for the future of Lithuania
In 2024, Lithuania plans to invest EUR 3.2 billion, of which the largest share of funds, over 1 EUR billion, will be allocated to the green transformation. In this area, it is planned to ensure cheap and non-polluting energy for energy communities, involving the most vulnerable residents, to promote the development of high added value and green technologies with loans to companies, and thus to provide loans to public and private individuals for renewable energy sources (RES) power plants and renovation of multi-apartment buildings. 34 % of funds are planned for green transformation.
EUR 94 million investments are planned for the digital transformation, focusing on the digitization of business processes of high added value industrial companies, as well as the transformation of state information technology management and the development of digital competences in the areas of high performance and artificial intelligence cyber security.
EUR 467 million is also planned to invest in the fields of research, business and innovation by strengthening innovation in research centres, expanding their supply and promoting the development and expansion of start-ups.
Together, respectively, EUR 178 million of investments will reach health care, emphasizing the quality and availability of health care services, EUR 200 million will be allocated to measures for jobseekers, improving the quality and accessibility of social services, and ensuring the effectiveness of social assistance in crisis situations.
17 % of investments or EUR 538 million is also planned for the transport sector. These funds will be used to adapt the railway network for international military mobility and to improve rail and road transport.
Moreover, additional funding for Lithuanian roads is planned, namely over EUR 715 million, of which EUR 543 million is earmarked for the Road Maintenance and Development Programme, EUR 130.5 million is planned to be allocated from the Temporary Solidarity Contribution, and EUR 41.8 million from EU financial support (European infrastructure networking measures).
Support to Ukraine
Another priority area in the next year's State budgetary plan prepared by the Ministry of Finance is support to Ukraine and its citizens fleeing the war waged by Russia and finding refuge in Lithuania.
Over EUR 127 million is planned to be allocated to education and social services to the war refugees who came to Lithuania, another EUR 70 million – for Lithuania's obligations to participate in EU and international formats, and EUR 35 million – for the agreement on the defence measure for Ukraine "European Peace Facility".
Revenue and expenditure increase
The draft 2024 State budgetary plan includes more than 17 billion of revenue. Compared to 2023, revenue grows by 9.4 % or EUR 1.46 billion.
The draft budgetary plan provides over EUR 20.5 billion of expenditure (it grows by 7.9 % as compared to 2023, or by EUR 1.49 billion), the largest share of which is allocated to social security – more than EUR 10 (additional EUR 977 million, as compared to 2023). EUR 3,836 million will be allocated to health care (additional EUR 456 million), for education – EUR 3,842 million (additional EUR 540 million), for defence – EUR 2,134 million (additional EUR 48 million), EUR 932 – for public order and public security (additional 76 million), for the areas of recreation, culture and religion – EUR 823 million (additional EUR 83 million), for housing services and utilities – EUR 577 million (additional EUR 147 million), for environmental protection – EUR 403 million (additional EUR 16 million), for general public services – EUR 2,399 million (additional EUR 18 million).
Municipal revenue is also growing; it will exceed EUR 5.8 billion (increase by EUR 811.1 million or 16.2 %, as compared to 2023). In addition, municipalities will be able to borrow up to EUR 103.5 million.
The draft 2024 State budgetary plan prepared by the Ministry of Finance provides for thatin 2024 the general government deficit will amount to -2.9 % of the gross domestic product (GDP), of which -2.5 % – after deduction of temporary measures (support to Ukraine), and general government debt will be 39.8 % of GDP.
Last updated: 23-11-2023
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