General government debt level continued to increase

According to the adjusted data of Statistics Estonia, in 2013 the Estonian general government deficit was 0.5% and the gross debt level was 10.1% of the gross domestic product.

At the end of 2013, the total expenditures of the general government exceeded the revenues by 89 million euros, according to the Maastricht deficit criteria. According to adjusted data,

the central government deficit decreased from 138 million euros at the end of 2012 to 64 million euros by the end of 2013. The deficit of the local government sector increased almost three times over the year, amounting to 89 million euros. The budget of social security funds was in surplus by 64 million euros.

The consolidated debt of the general government (Maastricht debt) rose by 10.3%, reaching 1.9 billion euros by the end of 2013. The overall debt level of the local governments grew by 19.7% compared to 2012. Social security funds did not contribute to the general government debt as at the end of 2013.

The indicators of government finance statistics are compiled on the basis of the new methodology of the European System of National and Regional Accounts ESA 2010. Several changes have been made compared to the preliminary indicators published in spring: the preliminary estimations have been replaced by actual data from the reports and the entire accounting has been transferred to the ESA 2010 methodology.

The majority of the methodological changes did not affect the balance of the general government consolidated budget and the debt level. For example, the changes arising from the capitalisation of research and development and military expenditures were made by rearranging different transactions which cancelled each other out. The change in the classification rules of public sector entities had the most significant impact on government finance statistics, resulting in the redistribution of public enterprises, foundations and non-profit institutions between the corporations sector, non-profit institutions serving households sector and general government sector.

Due to the reclassification, there was an increase in the number of public units assigned to the general government sector as non-market producers. The effect on the consolidated budget balance was positive in most years while the general government debt level increased slightly. The biggest change in debt burden occurred in the local government sector, due to the aggregation of the majority of the non-market producers assigned to the general government sector.

Diagram: Surplus/deficit and debt level of the general government in Estonia

In Estonia the general government sector comprises three sub-sectors: 1) central government (state budgetary units and extra-budgetary funds, foundations, legal persons in public law);
2) local governments (city and rural municipality governments with their subsidiary units, foundations); 3) social security funds (Estonian Health Insurance Fund, Estonian Unemployment Insurance Fund).

Eurostat is going to publish the data on the debt and deficit levels of the Member States according to ESA 2010 on 21 October.

Source: Statistics Estonia

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