Five-month state budget deficit smaller than expected

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Draft of the 2021 state budget. Source: ERR

As of the end of May, the Estonian general government budget deficit reached 1.6 percent of the gross domestic product (GDP) and was €467 million. Compared with the end of May 2020, the budget deficit stood at €325 million lower.

The fall was mainly due to increased tax revenues and lower supplementary budget expenses compared to the previous year, the Ministry of Finance announced.

The position of the state budget was also improved by the suspension of state payments to the second pension pillar.

Revenues from the sale of goods and services, the sale of assets and state property revenues have also increased.

By the end of May, the budget deficit of the Unemployment Insurance Fund (Töötukassa) amounted to €14.4 million due to increased expenses for unemployment insurance benefits and the wage support measure. At the same time, compared to the first five months of 2020, the deficit was lower by €121.8 million, as the wage support measure planned in the supplementary budget was smaller in volume this year and part of the expenditure was covered by the supplementary budget.

The Health Insurance Fund's (Haigekassa) budget surplus has increased by €21.8 million compared to the previous year due to operating support provided from the state budget to compensate for the receipt of social tax lower than the pre-crisis level.

The local government budget surplus fell by €11.2 million to €95.7 million in May. Compared with the previous year, the surplus stood at €79.5 million lower, as last year local governments received support from the state budget with a supplementary budget to cope with the crisis, the greater use of which was postponed to the second half of the year.

In May, total state budget expenses decreased mainly due to a decrease in domestic subsidies. The total expenditure of state budget institutions decreased from €1.0714 billion to €1.0276 billion, or €43.7 million compared with May of the previous year.

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Editor: Roberta Vaino

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