State-budget-funded institutions paid out €59 million more in domestic subsidies this January compared to the same period last year. The volume of social benefits increased by €25.1 million, mainly due to the rise in old-age pensions. Payments for old-age pensions grew by €20.3 million, while early retirement pension payments increased by €2.1 million.

By the end of January, the central government's budget position was in surplus by €123 million — an improvement of €187 million compared to the same month in 2024. This was primarily due to higher corporate income tax revenue, as businesses took advantage of the opportunity to withdraw profits before the tax increase.

"However, the January surplus is temporary, and in the coming months, the budget will return to a deficit, reaching approximately 3 percent of GDP by the end of 2025, according to the budget forecast," the Ministry of Finance stated.

A central government surplus of this magnitude has been rare in recent years, last occurring at the beginning of 2018.

Non-tax revenues also saw an increase in January, mainly due to higher receipts from external grants and CO2 revenues. Additionally, for the first time, the state collected a motor vehicle registration fee in January, bringing in €3 million for the state budget.

Almost all expenses up

Targeted financing allocated from domestic funds increased by €3.2 million in January, primarily due to higher subsidies in the cultural sector.

Operational subsidies grew by €30.7 million year-on-year, including increases in support for education, national defense and culture, as well as equalization and support fund allocations to local governments. The largest subsidies in January were directed to the Estonian Defense League and the CR14 Foundation, with a total of €17 million allocated from the state budget.

State-budget-funded institutions spent €119.6 million on labor costs, marking an annual growth rate of 6.8 percent. The increase in public sector wage costs was driven by the rise in the teachers' salary fund and pay raises in the defense sector. Additionally, labor costs grew due to higher payouts for special pensions.

The volume of investments increased by €2.1 million in January, primarily due to the procurement of defense-related equipment.

Financial and administrative expenses remained at the same level as in January of the previous year.

Forwarded tax revenues grew by €31.4 million, or 8.2 percent, in January. This growth was mainly influenced by increases in personal income tax, social tax and contributions to funded pension schemes.

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