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31/05/2016   National Audit Office to present report on Lithuania's long-term fiscal sustainability for the first time

The National Audit Office, as an independent fiscal institution, has for the first time conducted an assessment of the Lithuanian general government fiscal sustainability and is preparing a Fiscal Sustainability Report, which will be presented publicly in June of this year.

"Understanding that Lithuania has to think about the long-term reliability and sustainability of its fiscal system, we, as a fiscal institution, have launched our first independent assessment of Lithuania's fiscal sustainability. It will encourage us to begin a dialogue on whether the finances of the general government will remain sustainable in the long term. We think about the future generations, and we plan to conduct such an assessment on an annual basis", explained Auditor General Arūnas Dulkys.

The report, which will be announced on the 21 of June, will cover the period of 2016–2036. Fiscal sustainability is assessed based on the state's current liabilities, fiscal indicators and costs related to an ageing society. The assessment also uses data and projections published by other institutions (the European Commission, Eurostat, Statistics Lithuania, the Ministry of Finance, etc.). Macroeconomic, budget and fiscal indicators values are projected by applying the fiscal institution's assumptions and models. Calculations assume that the legislation currently in force will remain basically unchanged throughout the projected period.

Assessment of a country's fiscal sustainability is recommended by international institutions and organisations. Such an assessment is crucial for developing a better understanding of future expenditures that may arise due to currently enacted political decisions, helping manage risks, maintaining macroeconomic stability and growth as well as revealing the extent of state obligations in the future.

According to the International Monetary Fund, the World Bank and the Organisation for Economic Co-operation and Development, monitoring whether the state has ensured effective financial management and fiscal discipline in the long-term is one of the goals of independent fiscal institutions. Such assessments are currently carried out by fiscal institutions in many countries (Slovakia, UK, USA, Canada, South Korea, etc.).

The National Audit Office was mandated to perform the functions of the independent fiscal institution in 2015. It issues opinions and reports to the Seimas of the Republic of Lithuania and makes them publicly available.

 

Responsible for the information Communication Division
Last updated on 14 July 2016

National Audit Office of Lithuania

Pamėnkalnio St 27, LT-01113 Vilnius, Phone: + 370 5 266 6793, + 370 5 266 6752, Email: nao@vkontrole.lt.