The Government approves the draft State budget for 2025
The draft State budget for 2025 was presented today at the Government and approved. It focuses on three priority axes, i.e. increasing personal income, strengthening security and investing in Lithuania's future, consistently identified by the Ministry of Finance during the entire tenure.
”In the last draft of the State budget of this term, we stayed consistent and didn't get distracted – the growth of personal income, strengthening of the national security and the promotion of high-added-value investments have been maintained as key priorities. Looking at the achievements during our tenure, we have more than doubled our defence funding, increased the real income of those earning the minimum monthly wage by 74%, old-age pensions – by 80% and salaries in the public sector – by 67%. These figures not only show our strong commitment to grow and strengthen Lithuania during the entire tenure, but also ensure the growth of people's well-being”, stressed Minister of Finance Gintarė Skaistė.
Increasing personal income
The draft budget for 2025 continues to consistently follow the Government’s policies, i.e. increasing personal income, foreseeing for this EUR 1.9 billion. Where, EUR 792 million out of this amount will be allocated to increase the income of workers.
The largest share of this amount, i.e. EUR 394 million, will be used to increase the salaries of teachers, lecturers, scientists and other teaching and non-academic staff. EUR 230 million will be allocated to increase the salaries of doctors, while the remaining EUR 105 million – to increase the salaries of workers of the Fire and Rescue Department, prosecutors, investigators, salaries of workers of cultural institutions and art workers and other public sector employees. It is estimated that, as compared to 2024, the salaries of doctors will grow on average by EUR 305 (10%), nurses – by EUR 141 (10%), residents – by EUR 144 (10%), cultural and artistic workers – by EUR 83 (7.6%), while as of 1 September the salaries of teachers will increase by EUR 142 (8.2%), the salaries of lecturers will also increase by EUR 164 (8.2%) as of September.
The next- year budget proposes to increase the minimum monthly wage (MMW) by 12.3 % from EUR 924 to EUR 1,038. This change will mean an additional revenue increase of EUR 68.97after taxes for the lowest income earners. As compared to 2020, the income after taxes for MMA earners will increase by a total of EUR 330.16 or even 74% in 2025.
In the draft State budget, the support for the most vulnerable ones will receive an additional funding of EUR 487 million. Of which, EUR 425 million will be allocated for the indexation of social benefits, which includes child benefits, reimbursement of costs of individual aid, social assistance benefits.
In addition, the draft budget provides for a 10.6% increase in single person benefits to EUR 42.29. Approximately 230,000 people receive the single person benefit in Lithuania.
It also proposes solutions for the indexation of the state pension, small pension premiums and the increase of the state pensions of the affected persons, for a total amount of EUR 52 million.
The draft budget increases old-age pensions by 12.7% with EUR 616 million, which will mean an average monthly increase of EUR 81 for senior citizens with a minimum period of service (the pension increases from EUR 640 to EUR 721). This decision guarantees a steady increase in the purchasing power of senior citizens, whose income will grow by more than 10%, taking into account the inflation rate of 2.5% projected for next year. The good news for senior citizens is that their income will grow even more than that of the working population in 2025. Comparing pensions since the start of the tenure in 2020, they increase by 80% or EUR 321 after taxes. This decision will affect 637,000 people.
Strengthening of the national security
Consistently implementing the agreement between the Parliamentary parties and Lithuania's commitments related to NATO membership, the draft State budget prepared by the Ministry of Finance commits to ensuring sustainable financing by further strengthening national defence capabilities and military mobility. After the Seimas approved the Defence Fund package prepared by the Ministry of Finance on 20 June 2024, the funding of the Ministry of National Defence, including the Defence Fund, will exceed EUR 2.5 billion and will amount to 3.03 % of gross domestic product (GDP).
The Government, political parties, business and non-governmental organisations unanimously agreed that 3% of GDP funding would be needed to meet the critical needs of hosting the German brigade, developing the national division and counter-mobility measures, foreseeing additional sustainable sources, and all other needs above 3% of GDP threshold – will be implemented by creating more convenient support options and borrowing through defence bonds. These tools can be used on the website gynybosfondas.lt.
At the same time, the draft State budget for 2025 maintains the continuity of the right to borrow for the needs of national defence, defence industry and the deployment of the German brigade.
Investing in Lithuania's future
In 2025, Lithuania plans to invest EUR 3.6 billion, of which the largest share – over EUR 1.71 billion – will be dedicated to the green transition. In this area, renovation of multi-apartment buildings, loans to renewable energy (solar, wind) power plants for private and public legal entities, investments in green industrial technologies and high value-added industrial development are planned.
The investments of EUR 263 million are planned for education, focusing on the implementation of the Millennium School Programme, ensuring a modern education accessible to all, creating a vocational education system that responds to market needs, introducing a one-stop-shop for career planning and skills development, and ensuring the effective management of the higher education system.
EUR 206 million of investments are foreseen for science, business and innovation: to create a coherent framework for promoting innovation activities, to implement mission-based science and innovation programmes, to strengthen innovation ecosystems in science centres, to improve the competitive environment for attracting investments.
EUR 147 million of investments are foreseen to digital transformation – to develop technological solutions and tools for safe and convenient use of services, state information technology management reform and promoting the digitalisation of businesses.
The Infrastructure Fund and resources for Lithuanian roads
The Infrastructure Fund is planned to be set up in 2025 with an investment target of EUR 1 billion in 2025-2027. The Fund will invest in financially viable projects such as defence industry, maritime and airport infrastructure and railway infrastructure, the development of public-private partnership projects such as military infrastructure projects, data centres, energy infrastructure. In 2025-2027, the State contribution and ILTE resources to this Fund would amount to EUR 50 million annually. The rest would come from private investors – international financial institutions, private equity funds, pension funds.
The draft State budget for 2025 foresees the increased funding for Lithuanian roads of EUR 784 million, of which EUR 563.2 million is foreseen for the Road Maintenance and Development Programme, EUR 59.1 million is foreseen to be allocated from the Defence Fund to military mobility and another EUR 161.2 million from the EU financial support (Connecting Europe Facility and EU Fund resources for 2021-2027).
Revenue and expenditure – grow
The State budget for 2025 foresees EUR 17.98 billion of revenue. As compared to 2024, revenue is increasing by 5.9% or EUR 1 billion.
The draft foresees over EUR 23 billion of expenditure (an increase of 11.7% as compared to 2024, or more than EUR 2.4 billion), the largest share of which is earmarked for social protection – more than EUR 11.5 billion (an additional EUR 1.3 billion as compared to 2024). More than EUR 4.37 billion (additional EUR 533 million) will go for health care, EUR 4.32 billion for education (additional EUR 571 million), EUR 2.57 billion for defence (additional EUR 293 million), EUR 944 million for public order and safety (additional EUR 53 million), EUR 909 million for recreation, culture and religion areas (additional EUR 80 million), EUR 678 million for housing and communal services (additional EUR 101 million), EUR 438 million for environment (additional EUR 36 million), EUR 2.52 billion for general public services (additional EUR 141 million) and EUR 1.97 billion for economy (additional EUR 42 million).
Municipal revenue is also growing significantly, exceeding EUR 6.67 billion (as compared to 2024 by EUR 832 million, or by 14.2%). In addition, municipalities will be able to borrow additionally up to EUR 112.6 million.
According to the draft State budget for 2025 prepared by the Ministry of Finance, the general government deficit in 2025 will amount to -3% of GDP, while the general government debt – 43.2%. GDP