Riigikogu passes supplementary budget

The Riigikogu on Wednesday passed the 2024 negative supplementary budget in the volume of €183 million.
The total volume of measures in the negative supplementary budget amounts to €183 million, improving the budget position by €173 million. The supplementary budget law includes savings measures totaling nearly €115 million and additional revenues of €68 million. The savings in the state's current expenses mainly concern administrative and operating costs, and national foundations are also expected to contribute to the savings. To increase state revenues, more dividends will be taken from state-owned companies.
The government sector's budget deficit will decrease to €1.19 billion this year, or 3 percent of GDP, due to the measures in the supplementary budget. This deficit keeps Estonia within the European Union's budgetary rules.
All ministries will contribute to the savings, including their subordinate agencies and foundations where possible, with the main savings coming from operational and administrative expenses, according to the Ministry of Finance. This is expected to save €63 million.
Funding for national defense will not be reduced by the negative supplementary budget. However, the Ministry of Defense will find ways to save on labor and administrative costs in solidarity with others. The freed-up funds will be directed towards improving defense capabilities.
Major investments will not be canceled by the supplementary budget, but the budget position will be affected by the postponement of some investments. The Ministry of Finance noted that investments must be initiated as quickly as possible, aiming to cover 70 percent of the decided investments with obligations by August.
Investments in research, development and innovation will remain at the agreed level, making up 1 percent of GDP. However, as the economy is not performing as well as expected, the amount exceeding 1 percent of GDP according to the spring forecast will be considered part of the savings, reducing expenses by €19 million.
The savings measures do not affect the foundations of museums, theaters and concert institutions, as well as public legal entities. Hospitals are required to save 1 percent of their operating costs. To increase revenues, the dividend amounts from the State Forest Management Center (RMK) and TSO Elering will be raised.
In total, the negative supplementary budget includes nearly €115 million in savings measures and €68 million in revenue measures. This also includes a €29 million reduction in the government's reserve.
The law was passed with 61 votes in favor and 12 against.
On December 8 of last year, the Riigikogu adopted the 2024 state budget, which had revenue of approximately €16.7 billion and expenses of approximately €17.7 billion, with an investment budget of about €817 million and a financial transaction budget of €1.4 billion.
With the supplementary budget, Estonia complies with the European Union's budgetary rule that the budget deficit must remain within 3 percent of GDP.
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Editor: Marko Tooming, Marcus Turovski