Government approves negative supplementary draft budget for 2024

In an e-session on Wednesday, the government approved and will send to the Riigikogu for discussion this year's negative supplementary budget, which includes nearly €115 million in savings and €68 million in revenue measures.
This means that Estonia complies with the European Union's budget rule of keeping the budget deficit within 3 percent.
Savings in the state's current expenditure will mainly affect administrative and operational costs. Public foundations will also have to contribute to savings, and more dividends will be taken from state-owned companies to increase state revenues. The aim of the supplementary budget is to ensure the country's financial stability and sustainability.
The negative supplementary budget does not cut defense spending. However, in solidarity with others, the Ministry of Defense must also review its personnel and management costs and redirect savings toward improving defense capabilities. In the Ministry of the Interior's administration, savings will come from one-off expenses of around €3 million.
This time, the budget austerity measures do not affect museums, theaters, and concert foundations.
Hospitals will be required to reduce with 1 percent their operational costs.
Research and development to be cut by €19 million
Investment in research, development and innovation will remain at the agreed level of 1 percent of GDP. However, due to the worse-than-expected economic performance, the savings above 1 percent of GDP in the spring forecast, i.e. the expenditure level, will be reduced by €19 million.
The supplementary budget foresees additional revenues of €68 million, such as higher-than-expected dividends from state-owned companies Elering AS and RMK.
The government does not plan to cancel major investments, but the fiscal position will be affected by the postponement of some investments, such as those related to IT solutions and the construction of buildings and facilities.
The additional savings will come from a reduction of €39 million in the government's reserves, of which €10 million is a partial rescheduling of the Eastern border development by the Ministry of the Interior.
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Editor: Kristina Kersa