Finance ministry: 8 percent fall in GDP in 2020 without additional measures

The 2020 state budget bill (picture is illustrative).
The 2020 state budget bill (picture is illustrative). Source: ERR

The Estonian economy could contract by up to 8 percent this year in the wake of the coronavirus pandemic, unless the government introduces additional measures, the Ministry of Finance says.

"The recent forecast has been updated with the impact of the economic environment and movement restrictions, but does not include government measures," said Finance Minister Martin Helme (EKRE) according to ERR's online news in Estonian.

"The state's goal in contributing to the economy, in the form of various support measures, is to mitigate the economic downturn forecast. We are working to launch these measures as soon as possible."

A state budget strategy procedure would normally be conducted in April, but is off the table this year due to the pandemic. On the other hand, the government is presenting its supplementary budget, containing further economic measures aimed at getting on top of the downturn.

Worth a total of €2.5 billion, the supplementary budget contains a wide array of measures including dompany support through various state-run or related bodies (Enterprise Estonia, KredEx), plus efforts in the longer term such as deferring tax arrears, suspending pension contributions, slashing excise duties, and compensating cultural and sporting events and organizations affected by the lockdown.

The government met at length Wednesday to discuss the package and is to present its supplementary budget before the Riigikogu for the first round of voting Thursday.

Whether the 8 percent downturn forecast was intended as justification and to grease the wheels of the supplementary budget at the Riigikogu, or to facilitate a second supplementary budget, was not reported.

The government is to hold a press conference at 11 a.m. Thursday, where the supplementary budget is to be introduced by Prime Minister Jüri Ratas (Center) and Isamaa chair Helir-Valdor Seeder, as well as Martin Helme, according to a government press release.

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Editor: Andrew Whyte

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