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Ingrida Simonyte, proposed for the position of prime minister in Lithuania, says the growing state debt has become a problem already.
Šimonytė: growing state debt becomes problem
© DELFI / Domantas Pipas

If nothing is done, the debt level will soon exceed the 60 percent GDP level, she says, therefore, bringing it back onto a sustainable track will not be easy.

"The state debt will jump significantly this year and will continue growing next year," Simonyte told lawmakers on Thursday after President Gitanas Nauseda nominated her for prime minister.

"We can thank the euro area that the price of that debt is favorable for us today," she added.

In her words, the debt level will go up almost as much in 2020-2021, with economic loses being considerably lower, as it did during he 2009-2019 crisis when the economy shrank almost a fifth.

Lithuania's state debt stood at 35.9 percent at the end of 2019 but is estimated to get closer to 48 percent at the end of this year due to the coronavirus crisis, and is expected to cross the 50 percent threshold in 2021. Under the Maastricht criteria, a country's debt level should not exceed 60 percent GDP.

Lithuania's state debt level stood at only 14.6 percent at the end of 2008, but grew to 36.3 percent over the next two years.

BNS
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