On Monday evening, the Riigikogu passed the second reading of the Supplementary Budget Bill 2020 which agrees how the government will support the economy in order to mitigate the impact of the coronavirus (COVID-19).
According to the supplementary budget, the size of the general government nominal deficit is estimated to be €2.62 billion inclusive of the cost of the economic support measures. The negative impact of the mitigating measures on the budgetary position will be €1.15 billion.
The supplementary budget is to reduce the receipts of the state budget this year by €1.63 billion compared with the current budget. The impact of the supplementary budget measures on the expenditures of the current state budget is €513 million. This is complemented by the mobilization of reserves.
The nominal deficit will be 10.1 percent of GDP and structural deficit 5.5 percent of GDP. Due to an anticipated downturn of the economy, receipts of the Estonian state budget this year are estimated to decline by €1.6 billion from €11.8 billion to €10.2 billion.
According to the ministry's new forecast, the economic downturn is 10 percent compared to the baseline scenario of the state budget, which was lowered from the 2.3 percent growth forecast last fall to an 8 percent decline.
Minister of Finance Martin Helme (EKRE) said the supplementary budget aims to cover unforeseen expenses caused by the coronavirus pandemic and to stimulate entrepreneurship and the labor market during the ensuing economic and public health crisis. Additional resources must be inserted into the economy during difficult times, he said.
The Riigikogu is handling the 2020 supplementary budget bill and a bill seeking to amend the associated laws in an accelerated procedure.
Motions to amend the supplementary budget bill are submitted until April 14.
Editor: Helen Wright