State debt burden to rise by €780 million in 2023

2023 state budget  explanatory memorandum.
2023 state budget explanatory memorandum. Source: ERR

While Prime Minister Kaja Kallas (Reform) told ETV news show "Aktuaalne kaamera" (AK) live in studio last week that the state debt burden is set to increase by €250 million in the coming year, the Ministry of Finance confirmed what ERR had already claimed, namely that the debt will actually increase by €780 million.

Last Thursday (link in Estonian), Kallas answered Priit Kuusk's question on the air during the AK broadcast on whether there is a danger of the national debt getting out of control if the debt increases by €780 million in the coming year, by stating that such a large increase in the national debt was not going to be the case.

"It won't grow by €700; our state debt will grow by €250-300 million. In percentage terms, it won't actually increase significantly - from 19 percent to 19.4 percent next year. Most likely, all the years have been combined here, because for the first time we composed the state budget strategy alongside the budget," the prime minister said.

ERR reports however that page 10 of the explanatory memorandum to the state budget bill has it that: "Due to, among other things, a significant increase in security and social protection costs, the debt will increase by approximately €780 million, to 19.8 percent of GDP."

ERR asked both the Government Office (Riigikantselei) and the Ministry of Finance about which figure should be relied on.

The Ministry of Finance sent a reply lunchtime Tuesday, that: "Pursuant to the final information, it was specified that, according to the draft bill on the state budget for 2023, the debt burden of the government sector will increase in 2023, compared with 2022, by approximately €780 million, or 19.8 percent of GDP."

According to the Ministry of Finance, the €250 million quoted by Kallas to AK on September 29 constitutes a sum that will be added to the debt burden in the coming year, compared with what was expected in the spring forecast.

ERR reports that the prime minister mentioned the €250 million sum several times last week, and not only on the AK broadcast.

The state budget bill for 2023 is at the Riigikogu for debating and voting, with the aim of passing by mid-December.


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Editor: Andrew Whyte

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