Lithuania’s Seimas (Parliament) has approved the 2025-2027 budget, outlining major tax and spending priorities for the coming years. With a strong focus on defense funding, infrastructure, wage increases, and social benefits, the budget reflects the government’s commitment to national security, economic stability, and public welfare.
Among the most notable changes are increased defense spending, support for non-formal education, wage hikes for public sector employees, higher pensions, and significant investments in infrastructure and green initiatives. The budget also anticipates a government deficit of -3% of GDP in 2025 and a public debt of 44.4% of GDP by the year’s end.
Key Highlights of Lithuania’s 2025-2027 Budget
🔹 Significant Increase in Defense Funding
- The government is prioritizing national security by committing to at least 3.5% of GDP for defense spending.
- An additional €800 million will be borrowed to strengthen military infrastructure, enhance military mobility, and support Lithuania’s growing defense industry.
- The total defense budget will exceed €2.5 billion in 2025.
- Citizens can support national defense through voluntary contributions or by purchasing defense bonds via the Defense Fund.
🔹 Boost in Funding for Public Security
- The State Security Department will receive an extra €11.9 million in funding.
- The Management Security Service will see an increase of €2.9 million.
- Additional funds will go toward diplomatic security, Lithuania’s Presidency of the EU Council, and investigative services.
🔹 Infrastructure Investments and Road Improvements
- A €20 million gravel road paving program will launch, allowing for the modernization of 25-30 km of road sections next year.
- Total road investment in 2025: €804 million, including:
- €583.2 million for road maintenance and development
- €59.1 million for military mobility
- €161.2 million from EU funding
- The Ministry of Finance will be authorized to borrow additional funds for major road and bridge projects.
🔹 Education and Public Sector Wage Increases
- A €800.1 million package will be allocated to increase wages across the public sector.
- Breakdown of wage increases:
- Teachers: +€142/month (8.2%)
- Higher education lecturers: +€164/month (8.2%)
- Doctors: +€305/month (10%)
- Nurses: +€141/month (10%)
- Cultural and arts workers: +€83/month (7.6%)
- Police, prosecutors, firefighters, and investigators: significant salary hikes
- The minimum monthly wage (MMA) will rise by 12.3% to €1,038.
🔹 Social Benefits and Pension Increases
- An additional €487 million will be allocated to support vulnerable groups.
- Old-age pensions will increase by 12.7%, with an average pension rising from €640 to €721 per month.
- Single-person allowance will rise by 10.6% to €42.29/month, benefiting approximately 230,000 people.
- Child benefits, individual assistance, and compensation programs will also see increased funding.
🔹 Green and Digital Investments
- Lithuania will invest €3.6 billion in progress, including:
- €263 million for green energy transitions
- €263 million for education development
- €206 million for science, business, and innovation
- €147 million for digital transformation
🔹 Municipal and National Budget Outlook
- Total state budget revenue for 2025: €17.98 billion (5.9% increase from 2024).
- Total government expenditure: €23.1 billion (12.1% increase from 2024).
- Municipal revenues will exceed €6.67 billion, growing 14.2% from 2024.
- Municipalities can borrow an additional €112.6 million to support local projects.
How Will These Changes Impact Businesses and Citizens?
✔️ Businesses: Increased public spending, infrastructure projects, and digital investments may lead to new government contracts and economic opportunities.
✔️ Employees: Wage increases in the public sector could put pressure on private sector salaries, leading to potential wage growth across industries.
✔️ Investors: The government’s borrowing increase for defense and infrastructure could affect Lithuania’s financial markets and debt outlook.
✔️ Retirees and Low-Income Families: Higher pensions and expanded social benefits provide increased financial security.
✔️ Taxpayers: Higher government spending may influence future tax policies, but no major tax hikes are included in this budget.
When Does the Budget Take Effect?
The 2025-2027 budget officially took effect on January 1, 2025.
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