2. The Assessment of the Stability Programme of Lithuania for 2018
Erika Latyšovič
Advisor of the Budgetary Policy Monitoring Department.
11th of June, 2018

3. The Assessment of the Stability Programme of Lithuania for 2018
Motivation
In 2017, the Ministry of Finance as a starting point for GG budget plans for and assessment of the compliance with fiscal rules used the values from the Stability Programme of Lithuania for 2017 (not assessed by IFI)
In 2018, responding to that Lithuania‘s IFI conducted an assessment of the Stability Programme of Lithuania for 2018, which had the following goals:
to provide an independent opinion on the GG balance and debt for 2017
to assess both the soundness of the GG surplus and the fiscal policy stance for 2018

4. General Government Surplus for 2017
The Assessment of the Stability Programme of Lithuania for 2018
General Government Surplus for 2017
Sources: the Ministry of Finance, Statistics Lithuania, fiscal institution’s calculations

5. 2017 GG Surplus is due to temporary and one-off factors
The Assessment of the Stability Programme of Lithuania for 2018
2017 GG Surplus is due to temporary and one-off factors
Spending on military equipment
State Company “Deposit and Investment Insurance”
Universities
Others
Sources: the Ministry of Finance, Statistics Lithuania, fiscal institution’s calculations

6. Nominal and Structural GG Balances in EU Member States, 2017
The Assessment of the Stability Programme of Lithuania for 2018
Nominal and Structural GG Balances in EU Member States, 2017
Sources: Eurostat, European Commission’s 2018 spring projections

7. Soundness of the GG surplus for 2018
The Assessment of the Stability
Programme of Lithuania for 2018
Soundness of the GG surplus for 2018
According to IFI‘s calculations, the estimate of the GG surplus for 2018 was revised downwards from % GDP
0.2 % GDP
the failure to execute the major taxes and social insurance contribution plans for 2017
performance trends for the first quarter of 2018
municipal budgets approved in 2018
Government decisions which would likely result in higher expenditures

8. The Dynamics of Lithuania’s Output Gap in 2014–2021
The Assessment of the Stability Programme of Lithuania for 2018
The Dynamics of Lithuania’s Output Gap in 2014–2021
Sources: the Ministry of Finance, European Commission, fiscal institution’s calculations

9. The Fiscal Policy of Lithuania will maintain its Pro-cyclical Stance
The Assessment of the Stability Programme of Lithuania for 2018
The Fiscal Policy of Lithuania will maintain its Pro-cyclical Stance
Neutral fiscal stance: –0.2 ≤ SPB change < 0.2
Normal times: –1.5 ≤ output< 1.5
Sources: the Ministry of Finance, European Commission, fiscal institution’s calculations

10. The Assessment of the Stability Programme of Lithuania for 2018
Summary
2017 GG surplus is due to temporary and one-off factors
According to fiscal institution’s calculations, the estimate of the GG surplus for 2018 was revised downwards from 0.5 to 0.2 percent of GDP
Given the reduction of the GG primary structural balance in 2018, the fiscal policy of Lithuania will maintain its pro-cyclical stance

11. The Assessment of the Stability Programme of Lithuania for 2018
Discussion 1 2 3
Meet
Does your fiscal institution carry out an assessment of the Stability programme and, if no, do you have any plans for such assessment in future?
What are the main goals, challenges and problems that IFI’s have faced with during assessment of the Stability programme? ? .

12. „The Assessment of the Stability Programme of Lithuania for 2018“
Report
„The Assessment of the Stability Programme of Lithuania for 2018“
Erika Latyšovič
Advisor of the Budgetary Policy Monitoring Department
(+370 5)
@valstybeskontrole