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Ratas: OECD approves of government's tax and budget course

Outgoing Minister of Finance Sven Sester (IRL) and Prime Minister Jüri Ratas (Center).
Outgoing Minister of Finance Sven Sester (IRL) and Prime Minister Jüri Ratas (Center). Source: (ERR)

Prime Minister Jüri Ratas (Center) said at Thursday's government press conference that the current tax and budget policy had the approval of the Organization for Economic Cooperation and Development (OECD). The government's changes to Estonia's strict budget rules were appropriate, the OECD had found.

“The OECD is an institution of great authority, and its opinion is important to the government. The latest OECD economic report supports the reform of tax-exempt income, and making the rigid budget policy more flexible,” Ratas said.

“Our activities must first of all increase the income of those who earn low or average wages, which in turn will contribute to the increase of individual consumption. Greater investment in the public sector also contribute to more rapid economic growth,” he added.

In the OECD’s opinion, changing the current strict rule concerning the budget's structural balance is appropriate, considering Estonia’s strong financial situation, and the need for investments. The prime minister's interpretation is that the OECD's verdict justifies the government's current course.

Ratas also said that though revitalizing the economy was important, they would also keep an eye on future growth. “There have been encouraging messages from several sectors of the economy that provide a strong foundation for further broad-based growth,” Ratas said. “Increased employment will in turn increase the welfare and cohesion of society, which is also one of the targets of the coalition.”

In the first quarter of the year, the economic growth of Estonia accelerated to 4.4 percent. The last time Estonia saw economic growth of this magnitude was in 2012.

Editor: Dario Cavegn

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