Within the general government sector, a deficit only applied to central government – local governments and social security funds were in surplus for the first two months of the year, finance ministry Helin Kütt said.

The general government budget surplus for January stood at €8 million – central government was also in deficit in the first month of the year.

Year-on-year, all sub-sectors saw significantly better positions at the end of February, mostly due to raised tax receipts, in turn the result, partly, of inflation, the ministry says.

The central government's budgetary position (meaning primarily the state budget) came to €207 million at the end of February, €61 million less than the same period in 2021.

Kütt noted that the increase in expenses was as expected in February, but qualified that by saying that, since the growth in tax revenues has also been higher than usual, the position is also a better on. 

Income tax receipts have grown the fastest in two months, by almost 21 percent compared with the previous year. 

The VAT position was also strong, at 16 percent higher in two months than a year earlier. Non-tax revenues also grew rapidly, the ministry said.

The position of the Health Insurance Fund (Haigekassa) and the Unemployment Insurance Fund (Töötukassa) was positive at the end of February, to the tune of €43.5 million. The health insurance fund's budget surplus has increased by €15 million, to €44 million compared to last year.

The budget deficit of the unemployment fund stood at €0.5 million in February, which is €30 million more than a year earlier. 

Unemployment stood at 6.9 percent in February, higher than in 2015 and in early 2020, when it ranged from 5 to 5.5 percent.

At the end of February, the local government budget surplus came to €21 million, €16 million more than in January 2021.

The total expenditure of state budget institutions increased by €106.3 million or 11.6 per cent in February 2022, compared with February of the previous year. 

The increase in total expenditure was mainly driven by domestic subsidies and tax revenues.

Expenditures affecting the state budget position, which are expenditures excluding foreign funds and tax revenues, increased from €640 million in February 2022, to €703.6 million, or €63.6 million, compared with February of the previous year, which makes the annual growth rate 9.9 percent.

The increase in expenditure affecting the state budget position in February was mainly the result of domestic subsidies, which increased by €56.7 million compared with the same month of the previous year: social benefits by €6.7 million, domestic government grants for operating expenses by €49.7 million and operating subsidies by €0.6 million.

Domestic investment subsidies fell by €0.5 million in February.

Domestic government funding for operating expenses was boosted in February by a €9-million measure to mitigate the rise in energy prices financed by CO2 quota revenues for local governments, compensation of €34.2 million for electricity and gas network charges and subsidies to the health fund to compensate for sickness.

Management costs increased 6.1 percent in February, mainly due to the cost of PCR testing aimed at curbing the spread of Covid.

According to preliminary data, the costs of electricity, heating and heat in the premises of state budget institutions increased by €1.3 million euros or 41.4 per cent in February compared with February of the previous year. From fall 2021 energy prices rose to unprecedented levels, and were still high in February, however.

Labor costs increased by €7.2 million in February 2022, growing by nine percent year-on-year. The main reasons for the increase in labor costs were the overtime pay paid to health care workers, the costs related to the involvement of additional labor to manage the corona crisis and the increase in salaries of employees in the field of education and internal security, Kütt noted.

Investments increased by 13.4 percent, or €2.8 million, in February. Compared with February of the previous year, expenditures on defense investments and construction of educational buildings, with a music and ballet school and the Laagri state gümnaasium being among the largest of these, increased in February. 

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