Government budgetary position improved last year, government debt increased
According to the preliminary data of Statistics Estonia, in 2025, the Estonian general government deficit was 1.2% and the debt level was 24.1% of the gross domestic product (GDP). At the end of last year, the total expenditures of the general government exceeded revenues by 490.5 million euros.
In Estonia, the general government sector comprises three sub-sectors: central government, local governments, and social security funds. The central government sub-sector includes state budget units, foundations, and legal entities governed by public law. The local government sub-sector includes city and rural municipality governments with their subsidiary units, and foundations. Social security funds include the Estonian Health Insurance Fund and the Estonian Unemployment Insurance Fund.
Pauline Kommer, the Government Finance Service Manager at Statistics Estonia, said that all three sub-sectors ended 2025 in deficit. “As in the previous five years, the central government had the biggest deficit in 2025 at 326.4 million euros,” noted Kommer.
In 2025, general government revenues grew by 8.8% and expenditures by 7.4%. “Revenues showed slightly faster growth than expenditures in 2025, but expenditures still exceeded revenues by 490.5 million euros, resulting in a budget deficit of 1.2% of the GDP,” explained Kommer.
The deficit was 326.4 million euros in the central government sub-sector and 95.2 million euros in the local government sub-sector. Compared with 2024, the deficit narrowed in both of these sectors. “Social security funds, which had been in surplus in 2024, ended last year with a deficit of 68.9 million euros,” said Kommer.
Social benefits and investments were the biggest contributors to the rise in expenditures
Last year, expenditures on social benefits increased the most, by 230 million euros. This includes expenditures on pensions which rose by 183 million euros. Investments grew by 306.3 million euros, primarily on account of investments related to military defence and infrastructure. Last year, labour costs increased by 6.3% for central government and by 3.8% for local governments. However, the increase in labour costs has slowed down in the last two years. Labour costs decreased by 6.3% for social security funds.
The deficit was reduced by increased receipts of personal income tax – up by 498 million euros year on year – which was supported by overall wage growth and the raising of the income tax rate in 2025. Revenues were also boosted by value added tax (VAT) receipts which were up by 331.7 million euros. “This resulted from the increased VAT rate and from continued inflation, which increased the level of taxable turnover leading to increased receipts. Social tax receipts grew by 276.9 million euros, with the main reason being the general increase in wages and salaries,” added Kommer.
General government surplus or deficit by sub-sector, 2016–2025
| General government consolidated surplus/deficit | Central government | Local governments | Social security funds | |
|---|---|---|---|---|
| 2016 | -0.1 | -0.2 | 0.1 | 0.0 |
| 2017 | -0.5 | -0.5 | -0.3 | 0.2 |
| 2018 | -0.6 | -1.0 | 0.2 | 0.3 |
| 2019 | -0.1 | -0.1 | -0.3 | 0.3 |
| 2020 | -5.4 | -4.2 | -0.1 | -1.1 |
| 2021 | -2.6 | -2.6 | -0.4 | 0.4 |
| 2022 | -1.0 | -1.2 | -0.3 | 0.5 |
| 2023 | -2.7 | -2.6 | -0.6 | 0.5 |
| 2024 | -1.7 | -1.4 | -0.4 | 0.1 |
| 2025 | -1.2 | -0.8 | -0.2 | -0.2 |
Maastricht debt grew by nearly 676 million euros year on year
The general government consolidated debt (Maastricht debt) amounted to 10 billion euros by the end of 2025, which corresponds to 24.1% of the GDP. The debt grew by 675.8 million euros compared with 2024. The general government debt to GDP ratio rose by 0.6 percentage points in 2025 year on year.
Compared with 2024, the total debt of the central government grew by 5.3%, or by 478.9 million euros, and amounted to 9.6 billion euros by the end of 2025. The central government debt increased primarily due to the issuance of government bonds for 500 million euros, with the volume of debt securities totalling 5.9 billion euros at the end of 2025. The volume of long-term loan liabilities fell by 5.2% year on year as a result of repayments and stood at 2.4 billion euros at the end of 2025. Foreign debt, i.e. liabilities towards the rest of the world, accounted for 72% of the central government’s debt – down by 1.6 percentage points year on year.
The local government consolidated debt was 1.7 billion euros at the end of 2025, up by 7.4% year on year. “The central government debt was driven up by the issuance of new government bonds, while loan liabilities decreased. In the local government sub-sector, it was the opposite,” said Kommer, adding that the debt grew due to new long-term loan liabilities which contributed 122.2 million euros to loan liabilities. On the other hand, the volume of long-term debt securities continued to decrease and was down by 6.7 million euros compared with 2024. Similarly to the central government, there was a year-on-year decrease in the share of foreign debt in the local government sub-sector – foreign debt represented 25.4% of local government debt in 2025.
Social security funds (i.e. the Estonian Health Insurance Fund and the Estonian Unemployment Insurance Fund) did not contribute to general government debt.
General government consolidated debt, 2016–2025
| General government consolidated surplus / deficit | |
|---|---|
| 2016 | 10.2 |
| 2017 | 9.4 |
| 2018 | 8.5 |
| 2019 | 9.0 |
| 2020 | 19.1 |
| 2021 | 18.4 |
| 2022 | 19.2 |
| 2023 | 20.2 |
| 2024 | 23.5 |
| 2025 | 24.1 |
Revised data on government finance statistics will be published in September 2026.
General government debt, or Maastricht debt, refers to the liabilities of the general government units in the following categories: currency and deposits, debt securities and loans. In other words, the general government debt shows how much the state has borrowed and to what extent it holds the funds of other units. The debt is calculated without interest liabilities.
Data as at 25 March 2026 are published. The indicator values may change if there are any revisions made in the data sources after this date.
See also the government finance section on our website.
More detailed data have been published in the statistical database.
When using Statistics Estonia’s data and graphs, please indicate the source.
For further information:
Kaia-Liisa Tabri
Communications Partner
Marketing and Dissemination Department
Statistics Estonia
Tel +372 5196 9617
press [at] stat.ee (press[at]stat[dot]ee)