Riigikogu committee to IMF: Estonia structural deficit to improve next year

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IMF logo. Source: Reuters/Scanpix

Estonia's structural deficit in 2022 will improve by two percentage points to 3.4 percent of Gross Domestic Product, members of the Riigikogu's finance committee told the International Monetary Fund (IMF) Thursday.

Speaking to the IMF via remote video link, the committee also said that in the years after 2022, the structural deficit will also fall by at least 0.5 percent of GDP per year, as required by fiscal rules.

The meeting came the week after the government unveiled its state budget strategy for 2022-2025.

Compared with a Ministry of Finance forecast, the structural deficit is decreasing faster than expected, BNS reports.

The finance committee members, headed by the committee's leader Erki Savisaar (Center), who was joined by MPs Aivar Sõerd (Reform) and Riina Sikkut (SDE), provided the overview via video link as part of the IMF's annual visit to Estonia, which this year is taking place remotely, due to COVID-19 considerations, and which started on April 26 and runs to May 14.

The head of the IMF delegation is Cheikh Anta Gueye, who was in Estonia in person in November 2019.

The IMF discusses relevant economic policy issues with its member countries once per year, with this event followed by a report of the IMF's economic policy assessment for that country.

The government says it has followed the priorities of rapid exit from the pandemic crisis, the green transition and "digital leap", supporting public mental and physical health, financial sustainability, education and innovation, foreign policy activity, national defense and reducing regional disparities, while formulating its budgetary strategy.

The IMF virtual visit is also focusing on the socio-economic impact of the coronavirus crisis and the possibilities for mitigating this, as well as the longer-term view of the economy and fiscal policy.

The IMF delegation had requested the overview of bringing the state budget into structural balance and a presentation of expectations for next year's state budget, BNS reports.

The IMF delegation will also remotely meet up with heads and analysts from the government and ministries, the central bank and the Financial Supervisory Authority (Finantsinspektsioon), as well as some commercial banks, professional associations and private firms.

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Editor: Andrew Whyte

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