General government deficit decreased significantly, the debt level is stable
According to the preliminary data of Statistics Estonia, in 2021, the Estonian general government deficit was 2.4% and the debt level was 18% of the gross domestic product (GDP). At the end of last year, the total expenditures of the general government exceeded revenues by 721 million euros.
In Estonia, the general government sector comprises three sub-sectors: central government, local governments, and social security funds. Evelin Ahermaa, leading analyst at Statistics Estonia, said that both the central government and local governments ended 2021 in deficit which was, respectively, 742 million euros and 115 million euros. “Still, the central government budget was in a much better state than the year before – in 2020, its deficit was 1.2 billion euros, mainly due to measures related to COVID-19. On the other hand, for social security funds, revenues exceeded expenditures, resulting in a budget surplus of 136 million euros,” explained Ahermaa.
The general government consolidated debt (Maastricht debt*) increased slightly and amounted to 5.5 billion euros by the end of 2021. There was a rise in the debt of both the central government and local government sub-sector. Liabilities towards social security funds were 909 million euros. Long-term loan liabilities increased by 15% year on year. However, the general government debt to GDP ratio remained stable as the GDP also grew.
The central government sub-sector includes state budget units and extra-budgetary funds, foundations, and legal persons in public law. The total debt of the central government increased by 10% compared to 2020, amounting to 5.6 billion euros by the end of 2021. Long-term loan liabilities increased by 17%. The volume of long-term securities in the central government sub-sector had risen dramatically in 2020 but remained the same last year – 1.5 billion euros. Foreign debt, i.e. liabilities towards the rest of the world, accounted for 64% of the central government’s loan liabilities.
The local government sub-sector includes city and rural municipality governments with their subsidiary units, and foundations. The local government consolidated debt was 908 million euros by the end of 2021. Long-term loan liabilities increased by 7%, but the volume of long-term securities continued the downward trend and decreased by nearly a third year on year. The share of foreign debt dropped to 25% of local government debt.
Social security funds (i.e. the Estonian Health Insurance Fund and Estonian Unemployment Insurance Fund) did not contribute to general government debt.
* 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. It is measured as a share of the gross domestic product (GDP). The general government debt shows how much the state has borrowed and to what extent it holds the funds of other units.
The name derives from Maastricht criteria which, among other things, stipulate the general government debt limit for candidate countries to join the eurozone (the debt must not exceed 60% of GDP). The debt is calculated without interest liabilities.
See also the government finance section on our website.
More detailed data have been published in the statistical database.
For further information:
Media Relations Manager
Marketing and Dissemination Department
Tel +372 625 9181