According to preliminary data from Statistics Estonia, Estonia's gross debt level in 2020 was 18 percent of the gross domestic product (GDP). The general government deficit was 4.8 percent.
The general government sector comprises three sub-sectors: central government, local governments and social security funds. According to Evelin Ahermaa, an analyst at Statistics Estonia, last year, expenditures exceeded revenues both for central government and for social security funds; their deficits were respectively €991 million and €320 million.
"In 2020, the situation of the general government was considerably less favourable than the year before. The rapid growth in expenses was primarily due to coronavirus-related measures, such as support. In the case of local governments, however, revenues surpassed expenditures and their budget surplus was 5.6 million euros," Ahermaa said.
The general government consolidated debt amounted to nearly €5 billion by the end of 2020. Maastricht debt doubled compared to 2019 and was at its highest of the last 20 years. At the same time, Estonia's debt level is significantly lower than the upper limit of the Maastricht criterion. Both the central government and local government debt increased. Long-term loan liabilities grew by 38 percent year on year.
The central government consists of state budget units and extra-budgetary funds, foundations and legal entities governed by public law. The central government gross debt was €4.9 billion, of which €802 million were liabilities towards social security funds. The share of foreign debt, i.e. liabilities towards the rest of the world, in the central government's loan liabilities increased to 66 percent.
Foreign debt increased due to the issuance of long-term securities and loan taken from the Nordic Investment Bank. The volume of long-term securities of the central government increased substantially, totaling €1.5 billion at the end of the year. Short-term securities were also issued, and their volume at the end of the year was €425 million.
The local government sub-sector comprises city and rural municipality administrations with their subsidiary units and foundations. The sub-sector's consolidated debt grew by 16 percent in 2020 compared to 2019 and was €876 million. The volume of long-term securities dropped by 17 percent and loan liabilities increased by 21 percent year on year.
For more data on government finance, click here.
Editor: Kristjan Kallaste