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"This poorer economic forecast shows in the coming years the need to improve the state budget situation in the range of 100 million euros," said Prime Minister Taavi Rõivas at the government's Thursday press conference.

He said that the government always has tough choices on the table, and if the choice is between implementing car tax or a modest excise tax increase, then the latter is less painful for people.

"We also need to discuss at what pace the alcohol and tobacco excise duty should increase. Various governments have declared that alcohol and tobacco should not become cheaper in stores in comparison with the overall cost of living. Detailed excise increases in these issues need to be agreed. There is a need for wider society consensus here," he explained.

The Ministry of Finance published on Monday its fresh economic forecast, based on which, the Estonian gross domestic product will increase this year by 2%. In the autumn, when the 2015 budget was drawn up, the Ministry expected the GDP growth rate to be 2.5%. In 2016, the ministry predicts growth of 2.8% (3.5% growth predicted in the fall).