Estonia's share of social protection as a share of Gross Domestic Product (GDP) falls in the bottom third across the European Union, according to Eurostat data for 2018. At the same time, it lies in the top third for defense expenditure.
Estonia's total government spending in 2018 stood at 39.1 percent of GDP, higher than Ireland (25.4 percent), Lithuania (34.0), Romania (34.9), Bulgaria (36.5), Malta ( 36.6) and Latvia (38.5).
Estonia's defense spending in 2018 stood at 2 percent of GDP, in line with NATO requirements and a figure the same as in Greece; Latvia's defense spendingwas 2.1 percent, with the EU average standing at 1.7 percent.
In social expenditure, while the EU average on sickness and disability stood at 2.7 percent of GDP, Estonia's figure was 2.1 percent.
- Pensions: Estonia 6.7 percent of GDP (EU average - 10.1 percent).
- Family and child policy: 2.7 per cent of GDP (EU average - 1.7).
- Employment services 1.2 (same as the EU average).
- Other social costs: 0.3 per cent of GDP (EU average - 1.7 per cent).
Estonia also spends less as a proportion of GDP on health than the EU average - 5.1 percent of GDP compared with 7.1 percent.
However, Estonia's spending on education is higher than the EU average, at Estonia 6.2 percent of GDP for 2018 compared with the EU average of 4.7 percent, according to the data.
Overall EU figures
In 2018, total government expenditure in the EU amounted to 46.7 per cent of GDP.
The ratio of government social protection expenditure to GDP varied across EU Member States, from less than 10 percent in Ireland (9.0 percent) to nearly a quarter in Finland (24.1 percent) and France (23.9 percent).
Five EU Member States – Finland, France, Denmark, Italy and Austria –devoted at least 20 percent of GDP to social protection, while Ireland, Malta, Latvia, Romania, Bulgaria and the Czech Republic each spent 12 percent of GDP, or less, on this.
Health and education
Government expenditure on health highest in Denmark, and on education highest in Sweden With shares of at least 8 percent of GDP in 2018, Denmark (8.3 percent), Austria (8.2 percent) and France (8.1 percent) recorded the highest ratios to GDP devoted to health among EU Member States.
The highest ratios to GDP of government expenditure on general public services were observed in Greece and Hungary (both 8.3 percent), Finland (8.0 percent) and Italy (7.9 percent). For education, the highest shares were registered in Sweden (6.9 percent), Denmark (6.4 percent) as well as Belgium and Estonia (both 6.2 percent).
Social protection and health expenditure increased in comparison to other general government expenditure 'Social protection' and 'health' are the only two functions whose shares in total government expenditure increased during the period from 2007 to 2018, according to the data.
Social protection expenditure increased its share in total expenditure from 38.7 perecent to 41.2 percent over this period,, while expenditure on health increased from 14.3 percent to 15.0 percent of total expenditure. In contrast, government expenditure on 'public services', for example, fell from 15.0 percent of total expenditure in 2007, to 12.9 percent in 2018.
Among the main functions of general government expenditure in the EU, 'social protection' is by far the most important, equivalent to 19.2 percent of GDP in 2018.
The highest share of government expenditure on economic affairs in 2018 was recorded in Cyprus at 9.9 percent of GDP. For public order & safety, shares were highest in Bulgaria, Croatia and Hungary (2.3-2.5 percent).
In 2018, at least 2 percent of GDP was spent on defense by NATO members Greece, as well as Estonia and Greece as noted.
Evolution of general government total expenditure after the 2007-2009 crash
During the first three years of the economic and financial crisis (2007-2009), government expenditure as a percentage of GDP grew within the EU, from 45.6 percent of GDP in 2007 to 50.6 percent in 2009, which was partly due to a lower GDP.
Apart from an increase between the years 2011 and 2012 (from 49.1 percent to 49.7 percent of GDP ), and has steadily decreased ever since, remaining stable at 46.7 percent of GDP between 2017 and 2018.
This gradual decrease was partly the result of the fiscal consolidation measures, renewed economic growth and counter-cyclical reactions of government expenditure. In recent years, one-off expenditure to support financial institutions has been decreasing. Not all the functions of government expenditure evolved the same between 2007 and 2018. Some of the functions have a natural tendency to be counter-cyclical, even without a change in policy, Eurostat says.
The full Eurostat report is here.
Editor: Andrew Whyte