THE STRUCTURE OF THE NATIONAL DEBT AND STATE‘S BORROWING INFLUENCE FOR THE LITHUANIAN ECONOMY

Abstract

The governmental borrowing does not cause damage to the economy if only the opportunities provided by debt are used in an optimal way. The aim of this article is to determine a possibility to forecast the limits of the national debt acceptability, knowing the forecasted actual GDP growth and the value of the budget deficit. It is important to learn what level of the fiscal deficit is acceptable to the state and how it could be managed under certain economical conditions. In making a choice for the criteria needed to determine the acceptable level of the budget deficit, it is indispensable to make a notice of the possibility to apply those criteria, e.g. in analyzing and forecasting.

The objective of the article is to reveal the structure of the national debt and to determine state’s borrowing influence for the Lithuanian economy.

Within the frame work of the mathematical model, the authors propose to forecast the borrowing demands not exceeding the rates predicted by the Lithuania’s macroeconomics.