„Borrowing should be limited to temporary and necessary expenditure – say, in a particular case, to increase funding for national defence. If we are talking about borrowing for current expenditure – say, education, health care, other state functions – this is not a sustainable way“, Mauricas told Žinių Radijas.
The economist also stressed that borrowing for necessary expenditures is a better alternative than raising taxes, highlighting the German Brigade's reception and the creation of strategic military infrastructure. However, according to Mauricas, as industrial expectations deteriorate, the Government must return to tax solutions, including abolishing inefficient incentives such as those for central heating.
„All the institutions' forecasts for next year seemed overly optimistic, but now we see that expectations are deteriorating,“ Mauricas said.
„We should clean up our backyard, our tax system, and return to tax reform so that we do not take the easy way out, that here we are increasing a certain tax by one more percentage point, but increasing the fairness of the tax system,“ he said.
Moreover, Mauricas said Lithuania has „more room“ to continue increasing its budget deficit slightly due to its lower debt than neighbouring countries.
„Lithuania has a minimal budget deficit. We have been fortunate here – we have had a surplus of revenue thanks to a faster-than-expected jump in inflation thanks to economic growth. The economist added that we have relatively a bit more room than many other countries – for example, Poland has a much higher deficit, or Estonia, even though it raises taxes“.
According to the State Data Agency, industrial expectations in Lithuania deteriorated in June, with annual industrial growth of just 0.2%. Industrial production contracted by 2.1% in June compared to May, and manufacturing output contracted by a similar 2.2%.
