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2013 09 27

Central bank chief sees fiscal deficit as only threat to Lithuania's euro entry

The current situation is very favorable for euro adoption in Lithuania and the government's measures leading to an increased budget deficit pose no major risk of not meeting the fiscal deficit criterion, although it would be safer to have a reserve, Vitas Vasiliauskas, the central bank governor, tells BNS.
Vitas Vasiliauskas
Vitas Vasiliauskas / Irmanto Gelūno / BNS nuotr.

"At the moment, forecasts say yes, but where I see a big problem is that it is always more comfortable to make certain steps when you have a reserve. I think we would feel much more comfortable if the actual deficit situation at the end of the year were below three percent, so that we would not have to worry about decimal points this time. The same holds true for next year," he said.

The central bank sees the public sector deficit as the only criterion on which Lithuania still needs to do some work, Vasiliauskas says.

"We will have the final figure on December 31, but our forecasts show that the deficit will hover around 3 percent this year. It is planned to be lower next year," Vasiliauskas says, adding that it is too early to speak more specifically about 2014, because next year's draft budget has not been drawn up yet.

The inflation indicator is very favorable at the moment and it is not forecast to rise much next year, according to the Bank of Lithuania's governor.

"We have a rather unique situation now, when we can become a member of the euro area after making concrete decisions," he said.

Lithuania aims to join the euro zone on January 1, 2015.

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