Defense expenditures in Estonia have risen by €200 million on year this year so far, though this makes up less than one-fifth of the 2024 budget, of close to €1.2 billion, Uudeberg noted.

"If we take a look at the ratio of the rise in defense spending to the total government sector deficit, it is actually 17 percent. So, it can be stated that there are in fact a whole range of other factors which have contributed to the budget deficit," she told ERR's radio news Monday.

Between 2022, the year Russia's invasion of Ukraine began, and last year, defense spending in Estonia rose by one percentage point, to 3 percent of GDP for the year, and by nearly €560 million in cash terms.

Even this sum still only accounts for just over 40 percent of this year's budget deficit, Uudeberg added.

"Other costs have also significantly increased, which in turn have contributed much more to the government sector deficit," she said.

Finance ministry: Four main factors contributing to state budget deficit

Raoul Lättemäe, who heads the finance ministry's fiscal policy department, noted differences between how his ministry calculates spending, in comparison with the defense ministry.

The reasons behind the budget deficit are more complicated than simple percentage calculations suggest, he added, though conceded the Ministry of Defense has a point.

"The entire deficit does not come down just to this sole factor [of defense spending]," he told ERR.

"Whereas now there is a sense that all costs can be attributed to defense spending, then it is certainly not the case," he added.

Last autumn, the Ministry of Finance analyzed fiscal policy from 2019, before the pandemic, through to a forecast until 2027; the reasons for the current budget deficit and its future development depend on four factors, based on that analysis, Lättemäe went on.

One of these is defense spending and the one percentage point rise there, the others are: The growth in social security expenses by 1.1 percentage points of GDP and including those relating to pensions; the rise in healthcare spending of 0.8 percentage points, likely from lessons drawn from the pandemic, Lättemäe said, and fourthly, the one percentage point rise in interest rates.

While Lättemäe said the above analysis is likely outdated, it is still characteristic of the fact that the rise in defense spending is only one of four major reasons for the current state budgetary picture.

A 2023 state budget deficit of 3.4 percent was reported Monday. Costs last year exceeded revenues by €1.3 billion.

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