Minister of Finance T. Valys about the 2027 draft budget: “We need to invest in national security right here, right now. However, we must also take care of our people”
The Government approved the draft State Budget for 2027-2029, which reflects the essential commitments of the XXI Government – the goal of a fully safe person and a safe State.
“The current geopolitical situation obliges us to strengthen the country's defence and security. Being on NATO's eastern flank, we face special security challenges, therefore, strengthening the country's defence is an absolute necessity for us. We plan to allocate one of the largest shares of GDP to defence in Europe. But even in these circumstances, we cannot forget our people. They live in here and now, and their essential needs cannot wait for better times. Therefore, we must see not only the figures, but also people whose lives are affected by our decisions. Caring for people is not just an expense – it's a necessary investment in a strong and resilient State”, Prime-Minister Mindaugas Sinkevičius said.
Next year's draft budget has been prepared by coordinating ministerial proposals and assessing experts' comments.
“The budget submitted to the Government reflects today’s priorities and responsibilities of Lithuania. We have to invest in national security right here, right now, as we do not have time to wait, but at the same time we have to take care of our people. The measures foreseen in the budget allow for the simultaneous strengthening of defence capabilities, increasing personal income faster than inflation and sustaining the economic growth potential. It is a responsible balance between today's needs and the long-term goals of the State”, Minister of Finance Taurimas Valys said.
National defence and security
In 2027, funding for the Ministry of National Defence (MoD), together with the Defence Fund, will amount to EUR 4.8 billion, or 5% of gross domestic product (GDP). EUR 896.4 million, out of this amount, will come from the State Defence Fund (SDF). In total, together with the 2026 balance of EUR 60 million, the SDF funds will amount to EUR 956.4 million next year.
Compared to this year, MoD funds will increase by EUR 34.8 million, but due to the growing economy, defence funding in terms of GDP will decrease from 5.38% this year to 5% next year. This will allow Lithuania to remain one of the leaders of defence funding in the NATO alliance – among the countries allocating at least 5% of GDP to national defence.
Increasing wages of the working population
In addition to the security of the State, special attention will further be paid to the social security of people, additionally allocating for this purpose almost EUR 1.8 billion next year. EUR 450.2 million, out of this amount, will be allocated to increase the income of the working population.
EUR 245.1 million will be allocated for increasing the wages of teachers, researchers and sports coaches, EUR 45.3 million – for statutory (Fire and Rescue Department, Police Department, State Border Guard Service, Prison Service, Probation Service, Customs Department) and environmental protection officials, EUR 21.8 million – for workers of cultural institutions and arts workers, EUR 3.2 million – for judicial assistants and secretaries, and EUR 71.1 million – for other public sector workers (2.5% due to a basic amount increase).
It is estimated that next year, compared to 2026, wages for teachers ‘before taxes’ will grow by an average of EUR 92-130 (7.56%), for researchers – by EUR 132-152 (7.56%), for coaches – by EUR 125 (7.56%), for culture and arts workers – by EUR 96 (7.5%), for statutory and environmental officials – by EUR 128 (7.5%), for assistant judges and secretaries – by EUR 48 (5.7%).
Next year's budget proposes to increase the minimum monthly wage (MMW) by 8% from EUR 1,153 to EUR 1,245. This change will mean an additional EUR 55.66 growth in income ‘before taxes’ for people earning MMW.
Old-age pensions
The draft budget includes an additional EUR 715.5 million for increasing old-age pensions (taking into account the increase in the supplementary pension component from SODRA). Next year, the average old-age pension will rise by 10.4%, or EUR 78 (from EUR 747 to EUR 825); for those with the required length of service, the increase will be 10.9%, or EUR 88 (from EUR 807 to EUR 895). This measure will affect 659,000 individuals.
Next year, an additional EUR 142 million will be allocated for the indexation of social benefits, and EUR 304 million will be provided for additional health insurance contributions, of which, EUR172.8 million is related to new regulations coming into effect in 2027 (in 2026, the contribution for an individual insured at state expense is EUR 780.69, whereas under the new regulations, this contribution will rise to EUR 1,009.90 in 2027; this increase necessitated the aforementioned EUR 172.8 million from the budget).
Family package
A family package, comprising various measures to promote family well-being and demographic growth, is being submitted alongside the draft budget. It includes EUR 61.35 million for childcare and employment support, in the form of a "basket" that can be used for services such as nannies, extended-day school programmes, or camps; EUR 40 million for housing acquisition support, providing additional funding for existing assistance programmes as well as new incentives for those in the regions; EUR 25 million to enhance pension guarantees for individuals who raise children; and EUR 23.65 million for a primary education pupil’s basket—a one-time grant to help cover the cost of school supplies.
Roads
In 2027, a total of EUR 749.3 million will be allocated to the country’s roads. Of this amount, EUR 436.0 million is earmarked for the Road Maintenance and Development Programme (RMDP), EUR 240.7 million for the State Road Fund, and EUR 72.6 million will come from EU financial support.
Next year, national road funding will increase by a total of EUR 47.1 million (7.6%) to EUR 667.1 million, while EU funds will decrease due to the current funding period, which is going to an end (in 2026, EUR 200 million in EU funds were allocated to roads).
Savings and additional revenue
All ministries and bodies under their governance have been tasked with reducing their allocated funds by 0.5%, which will result in savings of approximately EUR 90 million for the State budget.
Additionally, further revenue is expected from improvements in administration, specifically, EUR 197 million to be generated through measures implemented by the State Tax Inspectorate, which propose stricter accountability and consequences for taxpayers who fail to meet the minimum criteria for a reliable taxpayer, including the potential for temporary restrictions on their business activities.
Revenue and expenditure – on the rise
The draft State budget for 2027 projects revenue of EUR 22.2 billion. Compared to 2026, revenue is set to increase by 5.2%, or EUR 1 billion. The State budget expenditure is projected at EUR 27.9 billion (an increase of 1.3%, or EUR 363 million, compared to 2026).
Municipal revenue is also seeing significant growth, projected to exceed EUR 8.1 billion (an increase of EUR 660.8 million, or 8.8%, compared to 2026). Next year, municipalities’ own-source revenue is set to grow by EUR 489 million (10.6%), while the State budget grants are expected to rise by EUR 171.8 million (6%).
The draft 2027 State budget, prepared by the Ministry of Finance, forecasts a general government deficit of -3.8% of GDP for next year, with general government debt projected at 48.2% of GDP.
Last updated: 16-10-2026
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