Lithuania's debt-servicing costs set to top one billion euros for first time
Lithuania's government debt-servicing costs will exceed one billion euros for the first time next year, with economists warning that the pace of debt growth toward a 60% of GDP threshold matters more than the figure itself.
Lithuania's cost of managing its government debt is projected to surpass one billion euros for the first time in 2027, according to Finance Ministry figures, even as the country's overall debt level remains among the lowest in the European Union.
The State Data Agency reports that Lithuania's general government debt stood at 33.3 billion euros, or 39.5% of GDP, at the end of 2025. That compares favourably with Greece (146.1%), Italy (137.1%) and France (115.6%), while Estonia, Luxembourg, Denmark and Bulgaria recorded the lowest ratios in the bloc.
Živilė Simonaitytė-Vasiliauskienė, an economist at the Lithuanian Confederation of Industrialists, says the trajectory of debt growth matters more than the current figure. The European Commission expects Lithuania's debt to climb to 48.4% of GDP by 2027, while the IMF estimates it could approach the 60% threshold around 2033 without further fiscal measures — a level that would sharply limit the government's room for additional spending.
A growing burden
Debt management costs have already jumped from 554.3 million euros in 2025 to a projected 1.03 billion euros in 2027, and are set to reach 1.15 billion euros by 2028. Simonaitytė-Vasiliauskienė warns that every additional 100 million euros spent servicing debt is money unavailable for education, health care, defence or tax relief.
Borrowing has also become costlier: yields on a Lithuanian government bond maturing in 2028 rose from 2.684% in January to 3.098% by August. Bank of Lithuania economists point to geopolitical risk, including Russia's invasion of Ukraine, as a factor that pushed Lithuanian bond yields close to Italian levels at times in 2022.
Despite rising costs, investor confidence appears intact — Lithuania borrowed 2 billion euros on international markets in January 2026, with demand several times higher than the amount offered. The Finance Ministry says that if fiscal rules are followed, the debt-to-GDP ratio should stabilise below the 60% threshold over the long term.
