On Wednesday, 56 Riigikogu MPS voted in favor and 29 against passing the State Budget for 2025 Act, which was initiated by the government.

Compared to 2024's budget, revenues are set to grow by €0.9 billion or 5.8 percent and expenditure by €0.7 billion or 3.9 percent. The budget foresees €1.9 billion in investments and investment grants.

Military defense expenditure will be 3.3 percent of Estonia's GDP. Investments are planned for the defense industry, ICT, the construction of Rail Baltica, roadworks, supporting the renovation of buildings, promoting the introduction of renewable energy, and renovating the Art Hall and the National Library.

There are also increases to the average old-age pension, the allowances for children and working-age people with a profound disability, as well as continued financing for the transition to Estonian-language education.

According to the act, the tax burden in 2025 will be 35.8 percent of GDP. The general government deficit remains at three percent of GDP, which fulfils the Maastricht budget balance rule.

According to a press release. with the State Budget for 2025 Act, the Estonian government has set the goals of assuring the security of the people and the country, cleaning up public finances, and ensuring sustainable economic growth.

"The key issue for the state budget is always its affordability and here the picture is still not good. We have managed to improve it by two percent of GDP compared to the spring forecast, but the bad starting point and the security situation made it difficult to get this budget together, and serious effort is inevitable in the coming years," said Estonian Minister of Finance Jürgen Ligi (Reform).

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