While general government deficit in Estonia stood at 1 percent of gross domestic product in 2022, state agency Statistics Estonia reports, government debt stood at 18 percent.
This meant that by the end of 2022, total general government expenditures exceeded revenues by €377 million, according to initial data.
In Estonia, the general government sector comprises three sub-sectors: central government, local governments, and social security funds.
Commenting on the results, Evelin Ahermaa, team lead at Statistics Estonia, said: "Similarly to 2021, there was again a significant improvement in the state of the central government budget – its deficit had been €785 million in 2021, mainly due to measures related to Covid."
"The deficit has been reduced by increased tax revenue: higher consumption and rapid inflation have boosted VAT receipts, while rising wages have meant more revenue from social tax and income tax."
"The rise in income tax receipts has also been influenced by the pension reform. On the other hand, for social security funds, revenues exceeded expenditures, resulting in a budget surplus of €157 million," Ahermaa went on, via a Statistics Estonia press release.
Both the central and local government ended 2022 in deficit, to the tune of €430 million and €104 million respectively, Ahermaa added.
The central government sub-sector includes state budget units and extra-budgetary funds, foundations, and legal persons in public law.
The total debt of the central government increased by 22 percent compared with 2021, amounting to €6.8 billion, by the end of 2022.
Long-term loan liabilities increased marginally (by 2 percent), but there was a considerable growth in the volume of long-term securities because, at the end of last year, the government issued bonds with a maturity of 10 years in the total amount of one billion euros, Statistics Estonia says.
This means the volume of long-term securities rose to €2.5 billion by the end of 2022 (up from €1.5 billion at the end of 2021).
Foreign debt, i.e. liabilities towards the rest of the world, accounted for 68 percent of the central government's loan liabilities.
Government debt 2022, quick facts (source: Statistics Estonia)
- The general government debt to GDP ratio remained stable as the GDP also grew.
- The general government consolidated debt (Maastricht debt*) increased and amounted to €6.7 billion as of the end of 2022.
- There was a continued rise in the debt of both the central government and the local government sub-sector.
- The central government's liabilities towards social security funds grew and totaled €1.1 billion.
- Year on year, there was a slight increase (4 percent) in long-term loan liabilities, while long-term debt security liabilities increased by 62 percent.
*A term which derives from the Maastricht criteria which, among other things, stipulate that the general government debt limit for candidate countries to join the eurozone must not exceed 60 percent of GDP, as calculated without interest liabilities.
Local government debt 2022, quick facts (source: Statistics Estonia)
- The local government sub-sector includes city and rural municipality governments with their subsidiary units, and foundations.
- The local government consolidated debt stood at €987 million at the end of 2022.
- Long-term loan liabilities increased by 10 percent, but the volume of long-term securities continued the downtrend and decreased by nearly a fifth year on year.
- The share of foreign debt remained at the same level at 26 percent of local government debt.
- Social security funds (i.e. the Estonian Health Insurance Fund and the Estonian Unemployment Insurance Fund) did not contribute to general government debt.
Editor: Andrew Whyte
Source: Statistics Estonia