Budget, Estonia, Financial Services

Altogether 52 MPs voted in favor and 46 MPs against the 2019 State Budget Act, parliament spokespeople said.

During the third reading, 23 amendment proposals submitted to the bill were reviewed, of which three proposals made by the finance committee were supported.

The third reading saw an increase in regional investments, various third sector and civic society projects were supported as one-off expenses in the amount of 7.3 mln euros. The source for covering this is the reduction of the government reserve in the same amount.

According to Minister of Finance Toomas Toniste, the 2019 budget reflects Estonia's stable economic growth and contributes to the growth of the economy, welfare and defense capability without additional taxes and increases in debt burden, spokespeople for the Ministry of Finance said.

"The financial matters of the state of Estonia are in good order. Estonia is in the financial premier league of Europe and the entire world," Toniste said. "International ratings agencies also highlight Estonia as a country with extraordinarily strong finance. The ratings agency Fitch recently raised the rating of the state of Estonia and emphasized the good condition of the state's finance," the minister added.

Toniste added that the state budget will also maintain a tax peace. "We will not raise taxes or impose new taxes next year that would hinder our economic growth. Our state budget is balanced and the debt burden of the government sector will decrease next year as well," he said.

The volume of income of the state budget for 2019 is 11.06 bln euros. Compared with 2018, income will increase by 6.1% or 639.5 mln euros. The volume of expenses and investments of the state budget in 2019 is 11.32 bln euros. This is 7% or 735 mln euros more than in 2018. 

The government sector budget will run a nominal surplus of approximately 130 mln euros or 0.5% of GDP and will be n structural balance next year. The income of the entire government sector will be 11.21 bln euros and expenses and investments are to total 11.08 bln euros. The nominal surplus of the budget will enable to decrease the debt burden of the government sector and pay back loans in the approximate amount of 70 mln euros per year over the next few years.

The tax burden of next year will be 33.6% of GDP, which approximately on the same level as in the last three years. In comparison, the European Union average debt burden is 40% of GDP.

The expenses of the Estonian government sector will remain at approximately 40% of GDP next year. The central government's part of it will be approximately 33% and this will also not change significantly compared with previous years.