Prime minister: 2027 budget like a suitcase already full to bursting
The government wants to reduce next year's budget deficit from 4.4 percent to 4 percent of GDP. According to Prime Minister Kristen Michal, there is no room for additional spending in the budget.
Eesti 200 Chair and Education Minister Kristina Kallas said expectations for pay raises should generally be kept low.
"As always, expectations are high, but the possibilities are considerably more limited. The state budget situation has not improved or changed in the meantime. In general, Ministry of Finance officials do a good job. When they give us a forecast, it usually holds true. And it should continue to do so," Kallas said.
"So, after two weeks of budget negotiations, the situation remains such that the deficit is already large before we have even begun discussing any additional funding requests. Therefore, we currently have practically no room to increase spending," Kallas said.
PM: Deficit could fall to 4 percent
Prime Minister Kristen Michal added that if the government granted all the requests for additional funding currently submitted by the ministries, next year's state budget deficit would rise to 7.3 percent of GDP.
"The spring forecast for next year was minus 4.9 percent. We have now brought that down by half a percentage point, to 4.4 percent. The goal could be to get to 4 percent. That could be a target that allows us to keep the growth of the debt burden under control," Michal said.
"At the same time, there are also many requests for additional funding. I'm not dismissing any of them. They are all understandable. Wages and incomes rose quite quickly this year because, in addition to pay raises, we also abolished the progressive income tax system known as the 'tax hump,'" Michal said.
Michal said the debate would continue, but that the situation was exactly as Kristina Kallas had described it.
"It's like packing for a trip, when you're sitting on the suitcase with your knee, trying to squeeze everything into that minus-four-percent case. And the sides still won't come together. If anyone thinks there's room to put anything else in there, it certainly doesn't look like it. When you're packing for a trip, try seeing whether you can fit another pair of boots into your bag when it's already overflowing and the suitcase won't close. That's exactly where we are with the budget right now," Michal said.
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Editor: Aleksander Krjukov, Marcus Turovski
