The state budget for 2010 focuses on reviving economy

Estonian Government sent the 2010 Draft Budget Act to Riigikogu on 30th of September 2009. According to the draft Act the expenditure of the state total 89.6 and revenue 84 billion kroons (EEK). The public sector budget for the next year has been planned in a deficit below 3% of GDP.
The expenditure planned in the 2010 state budget amounts to 89.6 billion kroons, which is similar to expenditure in 2009. “The state is maintaining the level of expenditure to revive the economy and put it on a growth path. Education expenses, use of foreign funds and investments are the only categories that will increase in the state budget for the next year,” said Minister of Finance Jürgen Ligi.
The amount planned in the 2010 state budget for investments is approximately 10 billion kroons and the planned use of foreign funds amounts to 14.5 billion kroons. The growth of the support from EU increases primarily the budgets of the Ministry of Environment, the Ministry of Education and Research and the Ministry of Economic Affairs and Communications.
The amount and proportion of operating expenditure in the total state budget expenditure will decrease considerably in 2010. The operating expenditure of the state has been cut by approximately 2.8 billion kroons in comparison to the initial state budget for 2009. In total, 14.8 billion kroons has been planned for operating expenditure in the 2010 state budget of which personnel expenditures comprise 8.4 billion and other operational costs 6.4 billion kroons.
The revenue planned in the 2010 state budget amounts to 84 billion kroons, which is approximately 2 billion kroons less than in 2009. The proportion of non-tax revenue, such as income from sale of assets and proprietary income, will decrease the most. The decrease in tax revenue is compensated by 10-percent increase of alcohol excise in 2010 and 20-percent increase in tobacco excise starting from 2011. The accrual-based impact of the increase in excise rates on the budget is approximately 730 million kroons.
Estonia is likely to meet the Maastricht price stability criterion in November this year, when the harmonised consumer price index increase of Estonia for the last 12 months will remain below 1.5 percentage points, which is the minimum level of the reference value of the criterion. Minister of Finance Jürgen Ligi says that the 2010 state budget and the related agreements in the public sector are a step closer to joining the eurozone.
“For a year and a half the government has been working hard to keep the public sector budget deficit under control. The state’s revenue and expenditure must be kept sustainable to guarantee the state’s financial capacity. In order to achieve this, the government has made decisions in 2009 that improve the public sector budget position in a total amount of more than 19 billion kroons or 9 percent of GDP,” said Ligi.
The planned accrual-based deficit of the 2010 state budget is 5.2 billion kroons and the public sector deficit is planned below 3 percent of GDP or 6.2 billion kroons.

Source: Estonian Ministry of Finance


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