On Wednesday, Holm said, when comparing the baseline figures of 2025 state budget with this year's budget, expenditures have increased by €155 million. He said if cuts are initially made but funding is later added, it remains unclear whether the cuts actually took place or not.

Speaking at the government's weekly press conference on Thursday, Ligi expressed frustration with his assessment.

"We also discussed this today with the state auditor, from whose mouth this took flight, and whose official amplified it significantly on social media. And now everyone is having a great time, sneering as if the state has not been engaged in cost-cutting. This is offensive to people in the public sector who are experiencing it firsthand and who are losing their jobs," the minister said.

Ligi said ministries were required to cut operational costs and have done so.

"They did retain the right to replace these, for example, with cuts in subsidies, but the reductions are happening. The budget has not increased because of this. If the budget has increased, there are many different components. For example, we have explicitly stated that we are not cutting pension growth. Pensions are the largest expenditure item. Indexing them is a deliberate social policy choice because pensioners are in a relatively worse position than wage earners. We did not target pensions and do not plan to," the finance minister said.

"As for salaries, salary funds are being cut. Where public sector wages are actually increasing — where they increased last year and are likely to grow this year — is predominantly in healthcare. More people have been added to that sector than anywhere else, and there have also been wage increases," Ligi said.

Economy is growing

Indicators suggest the beginning of economic growth, he said: "As of now, we can say that economic growth has just begun. That is our sense, and we would stick to this forecast in that direction. There are signs of improvement."

"It is another question how bad the situation really was if employment is so high and wage growth is so solid," he added.

Ligi also commented on the unexpectedly improved budget balance.

"Although these figures are preliminary and will be refined in March, the budget situation has improved. What the specific components of that are is another matter. The improvement is not that significant — the deficit has decreased from three to two [percent]. Clearly, there are temporary factors at play, inter-year effects that we need to either deduct from the overall picture or take into account. The biggest factor is related to defense spending. This does not mean defense spending is being cut; it is still growing. However, the timing of defense expenditures between years is still under debate. The preliminary assessment is that part of the defense expenditure will shift into this year. Additionally, there is an inter-year movement due to changes in tax rates, which are not moving in a favorable direction for taxpayers. As a result, many decisions were made in December," the minister explained.

He did not specify the exact figures.

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