Government envisages balanced budget in 2017-2020
The government endorsed the fiscal targets of the country's budgetary strategy for 2017-2020, which envisage a structural fiscal surplus of 0.2% of gross domestic product (GDP) for next year and fiscal balance beyond that.
In 2014 and 2015 Estonia ran a small fiscal surplus, with the nominal surplus of the two years amounting to €120m combined. Prime Minister Taavi Rõivas (Reform) said the government wished to continue with a balanced budget, as this increased the competitiveness of Estonia's economic environment, a press release published by the Government Communication Office on Friday read.
The fiscal strategy lists as the government’s priorities the strengthening of Estonia's security, promoting economic growth, supporting economically vulnerable social groups, and carrying out a reform of government as well as local administration.
Concerning ways of ministries to additional funding, the government would focus primarily on activities related to these priorities. In addition, it would discuss other long-term solutions.
In 2017 several changes expected to have a significant fiscal impact will enter into effect. These include an increase in tax-exempt income, a reduction in social tax, the introduction of a tax reimbursement for low income earners, and raising family allowances.
The budgetary strategy is due to be completed by the end of the month.
On the basis of the strategy, the ministries will draft the state budged bill for 2017, which the government will review in autumn.
Estonia's national budget strategy is reviewed each spring. Part of the review plans for the three coming years have been adjusted, and the end of the period covered by the strategy extended by one year.