General Government budget’s deficit decreased

news release no 43

According to preliminary data of Statistics Estonia, in 2009 the Estonian general government sector deficit was 1.7% and gross debt level was 7.2% of Gross Domestic Product (GDP). In the 4th quarter the Estonian general government sector surplus was 4.3 billion kroons.

In 2009, the general government budget’s deficit remained within the limits set out in the Maastricht Treaty. At the end of the year the total expenditures of the general government sector budget exceeded the revenues by 3.7 billion kroons. For the first time the unemployment and health insurance funds ended in deficit: social security funds’ shortage of 1.5 billion kroons made up even 40% of the general government total deficit. Both, the central government’s and the local governments’ sector deficit decreased compared to 2008. In 2009, the central government deficit was 0.6% and the local governments’ sector deficit 0.5% of GDP.

The general government gross debt level still increased in 2009. By the end of the year the debt amounted to 15.5 billion kroons, growing by a third compared to the previous year. The central government’s debt level increased last year nearly twice compared to 2008, amounting up to 44% of the general government sector’s total debt. The total borrowing of the local governments sector increased only by 0.6 billion kroons in 2009, amounting to 8.7 billion kroons.

The 4th quarter 2009 compared to the 4th quarter 2008

In the 4th quarter of 2009, the general government’s total expenditures decreased by 17.5%. Expenditures decreased in all cost categories, only the expenses for social benefits increased by 0.5 billion kroons (6.2%). The general government’s wage costs were 1.2 billion kroons smaller.

The total income increased by 4.2 billion kroons (16.9%). The taxes on products and property income raised the total income — the receipts from the excises were high before the rise on the tax rate and the income from the dividends was received in the 4th quarter instead the usual 2nd quarter.

In the 4th quarter the increase of the general government gross debt level continued. While the domestic debt decreased by 0.7 billion kroons, the level of the general government’s foreign debt grew by 2.5 billion kroons in the last quarter. The growth of the foreign debt was mostly influenced by the outpayment of the large loan agreement taken for the co-financing the foreign aid programmes. Domestic debt decreased due to the return of the loans to the domestic banks. Both, the decrease of the domestic debt and the increase of the foreign debt, were mainly the result of the activities of the central government, the debt level of the local governments remained almost unchanged in the 4th quarter.

Eurostat publishes the debt and deficit levels of the Member States on 22 April.

For further information:

Agnes Naarits
Head of the National, Financial and Environmental Accounts Department
Statistics Estonia
Tel +372 625 9323

Information concerning the Excessive Deficit Procedure and the reporting can be found on the web site of Statistics Estonia (www.stat.ee under the heading “Subject Areas / Finance / Other information”) (http://www.stat.ee/finance)