Supplementary budget bill passes first reading in Riigikogu
The 2022 supplementary budget bill initiated by the Estonian government passed its first reading at an additional sitting of the Riigikogu on Wednesday night, as did three bills related to the supplementary budget.
The government's supplementary budget decisions totaled €732 million in volume, to which tax implications and changes to tax revenue-dependent costs were added, as a result of which the total volume of expenditures, investments and financing operations will equal €802.9 million.
Combined with supplementary budget measures, the general government deficit for this year has reached €1.72 billion, or 5.3 percent of Estonia's GDP.
€257.3 million from the supplementary budget has been earmarked for strengthening energy security, €247.6 million for strengthening security and resistance, and €242.7 million for initial expenses related to war refugees. Before the decision had been made to draw up a supplementary budget, the government had allocated funds from its reserves to the strengthening of Estonia's crisis preparedness. Part of the money from the supplementary budget will go to pay these funds back, increasing the government's reserve, together with money rolled over from last year's budget, to €100 million.
The supplementary budget accounts for nearly 2.2 percent of Estonia's 2022 GDP as based on the Ministry of Finance's spring forecast. The impact of the supplementary budget on the budgetary position is nonetheless somewhat smaller, as the use of subsidies will see the state get some of the money back in taxes. Taking both factors into consideration, the impact on the nominal general government budget position this year will be €627 million, or 1.9 percent of the GDP.
The state will have to finance measures with the help of its liquidity reserve as well as additional debt instruments. The issuance of short- and long-term bonds can be used as an instrument.
The supplementary budget's support measures and resulting negative cash flow will not increase the maximum permitted outstanding government debt of €7.2 billion.
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Editor: Aili Vahtla