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VILNIUS, Oct. 18 (Xinhua) -- Lithuania's gross domestic product (GDP) will advance by 2.7 percent next year, half a percentage point less than projected six months ago, the country's Finance Minister Rasa Budbergyte said on Tuesday.
The growth forecast has been revised downwards due to Brexit and geopolitical challenges, Budbergyte said.
"We must be ready to meet these challenges, therefore, we need to adopt a realistic and prudent budget which meets the rules of fiscal discipline," she was quoted as saying by local media.
The need to implement costly structural social reform in 2017 was behind the ministry's decision to trim the GDP growth projection as well, she added.
The minister of finance presented Lithuania's draft 2017 budget at the Seimas, Lithuanian parliament, on Tuesday.
"The project is based on September's macroeconomic projection which shows that GDP will advance by 2.7 percent in 2017; Lithuania's national audit office confirmed that this forecast is realistic," Budbergyte noted.
In her words, next year's budget focuses on decreasing social exclusion, boosting national defense funding and necessary structural reforms.
The implementation of the country's new social model will start next year with a new and more flexible labor code to take effect.
According to Budbergyte, national defense spending will grow in 2017 by nearly 148 million euros (162.56 million U.S. dollars), thus the aggregate defense budget will reach 793 million euros and will amount to 1.8 percent of GDP.
The deficit of the public sector should be 0.8 percent of GDP in 2017, which complies with the EU rules, the minister said. Enditem
