The budget of the central bank will increase by 4.6 pct

The budget of Eesti Pank for 2018 will be 21.5 million euros without cash handling costs, which vary a lot from year to year, the budget will be 0.9 million euros, or 4.6%, larger than in 2017.

Including cash handling costs makes the central bank budget some 1.2 million euros, or 5.1%, smaller next year than this year. The costs for cash will be lower next year because the central bank already made the preparations this year for the gold and silver collector coins that will be issued for the centenary of the Republic of Estonia in 2018.

The notable entries in the central bank’s budget for 2018 are the launch of a new statistics portal, and improved cyber and physical security. Spending on information technology will also be increased by the costs of TARGET2-Securities (T2S), the single securities settlement platform of the central banks of the euro area, which Estonia joined in the last year. This means spending on IT will rise by more than 0.5 million euros, and the central bank will invest a total of 1.5 million euros in fixed assets next year.

Eesti Pank’s forecasts show that the revenues for next year for the central bank will be 33.3 million euros, the largest part of which will come from revenues stemming from the single monetary policy of the central banks of the euro area. The bank also expects to gain income from management of foreign reserves and other operations. The bank is expected to make a profit of 11.8 million euros in 2018.

Figure Eesti Pank expenditure and budget 2004-2018 in relation to GDP. The columns show the budgeted expenditure for 2017-2018 and actual expenditure for the preceding years.


Eesti Pank plans to employ 234.2 people and the payroll will increase by 2.9% to 10.2 million euros. This will allow the bank to keep salaries for staff comparable to those for similar positions in the financial sector in Tallinn, where Eesti Pank mainly competes for employees.


Eesti Pank and the other central banks of the euro area are responsible for maintaining price stability in the euro area. To do this, Eesti Pank must be independent, and for this reason the bank is not covered by the state budget.

Eesti Pank aims to provide Estonian society with the highest possible quality of central banking services as efficiently as possible. One concern of the central bank is that costs should not rise as a share of GDP while the amount of work to be done remains the same. As cash handling costs can vary widely from year to year, they are not included in comparisons. The budget for 2017 was equal to 0.081% of GDP, but in 2018 it is expected to be 0.078% of GDP.

Eesti Pank’s operating revenues for 2017 will be published in the central bank’s annual report in the first half of 2018. Reports for earlier years can be accessed from the bank’s website:

Source: Bank of Estonia

17 pct more pesticides than in the previous year

According to Statistics Estonia, 834 tonnes of pesticides (by active substance) were placed on the market in Estonia in 2016, which is 17% more than in the previous year. The quantity of sold pesticides continues to increase.

Compared to 2015, the quantity of pesticides placed on the market was 143 tonnes higher, with the greatest year-on-year increase in the quantity of sold herbicides (up by 132 tonnes). Fungicides was the only group of pesticides where sales decreased. In 2011, the quantity of sold pesticides was 461 tonnes and has since doubled.

There aren’t many importers of pesticides in Estonia, but the number of sellers increases every year. The majority of pesticides can be bought and used without special permission, they are sold in gardening and hardware stores as well as at the market. Besides agriculture, pesticides have been used for a long time also in forestry, wood processing, in maintaining edges of roads and railways, on sports grounds and playgrounds as well as in parks and households.

Pesticides placed on the market are pesticides bought abroad and brought to Estonia for sales. Pesticides are used as weed, plant pest, parasite and insect killers. The characteristics of pesticides (stability, low solubility in water and high solubility in fats) lead to their accumulation in living organisms and food-chains. Depending on the biochemical processes that the pesticides block, their toxicity to human organisms varies (cancerogenic, teratogenic, estrogenic impact, etc.). The use of pesticides can fluctuate yearly depending on climate conditions and variability in plant damages and diseases.

For the statistical activity “Sales of pesticides”, the main representative of public interest is the Ministry of Rural Affairs, commissioned by whom Statistics Estonia collects and analyses the data necessary for conducting this statistical activity.

Source: Statistics Estonia

All banks should start providing instant payments within a year

Deputy governor of Eesti Pank Madis Müller says that within a year all the banks operating in Estonia should start providing instant payments to allow payment service users to send payments from one bank to another within seconds. SEB is the only bank in Estonia that currently offers instant payments to its customers. Versobank is listed as one of the first movers as well.

Central banks, commercial banks and clearing and settlement mechanisms (CSMs) have been working on delivering instant payments for years. From the end of November 2017, all banks and payment service providers are able to join the pan-European Single Euro Payments Area (SEPA) Instant Credit Transfer Scheme and process instant payments through compliant CSMs from one bank to another within only seconds. Clients can make and receive instant payments in those banks that have implemented the new scheme, while both the initiator and the recipient bank must adhere to the new scheme.

“When other banks start providing instant payments in Estonia alongside SEB, private customers and companies will benefit as funds will start to move between banks within only seconds. I hope that all the banks operating in Estonia will start to offer clients this new and improved payment method within one year at the latest”, said Madis Müller, Deputy Governor of Eesti Pank.

He added that when instant payments become more widespread, it will allow banks and companies to change to new business models. “It will be possible to develop payment solutions that make it easier for individuals to settle payments between themselves and to pay for purchases in shops or internet stores”.

The SEPA Instant Credit Transfer Scheme can be used to settle payments of up to 15 000 euros in less than 10 seconds within Europe. Instant payments will be available 24 hours a day every day of the year. The SEPA Instant scheme is voluntary for banks and payment service providers, but it does require them to be ready to process payments within seconds all round the clock.

Further information

  • The SEPA Instant Credit Transfer Scheme was launched on 21 November, when around 600 payment service providers made instant payments available in eight countries: Austria, Germany, Spain, Italy, the Netherlands, Estonia, Latvia and Lithuania. The new payment scheme was established by the European Payments Council. Adherence to the scheme is voluntary and it requires investment, so banks and other payment service providers may join the scheme over time. The banks can join the system on two levels, either only receiving instant payments from other banks, or also offering instant payment services themselves. Many payment service providers in other European Union countries have shown interest in joining the system in the years ahead.
  • Instant payments and making such payments available to payment service users in the market is an important focus for central banks in the shorter term. To make it easier for smaller banks to join the system and to ensure that the instant payment systems (CSMs) already in use in Europe are interoperable, the Eurosystem, which comprises the central banks of the euro area, are working together under the leadership of the European Central Bank to develop TARGET Instant Payment Settlement (TIPS). The development of TIPS should be completed within one year and it should go live in November 2018.
  • After the changeover to SEPA in 2014, the European Retail Payments Board* proposed that Europe should have at least one payment solution that worked instantly, all year round, and round the clock. The rules for the scheme were written by the European Payments Council**, and the infrastructure was put in place by November 2017. Since 21 November, banks have been able to develop solutions designed to suit the needs of their clients.

* The Euro Retail Payments Board (ERPB) was founded in 2013, and it is chaired by the European Central Bank and covers not only banks but also various supply and demand side payment market participants. The goal of the Board is to develop an integrated, innovative and competitive market for retail payments in Europe. For further information, see

** The European Payments Council represents payment service providers such as banks, and its goal is to support and promote pan-European payment schemes across Europe. For further information, see

Source: Bank of Estonia

The expenditure on R&D decreased by 11 pct

According to Statistics Estonia, in 2016, the expenditure on research and development (R&D) in Estonia amounted to 270.3 million euros, which is 11% less than in 2015.

38% of R&D expenditure came from the State Budget in 2016. The government has been funding a substantial share of R&D spending and this has remained stable for the past five years. In 2016, compared to 2015, the share of public funds in R&D expenditure decreased. The financing of R&D in Estonia depends to a large extent on the finances granted under the Structural Funds, which are included in the State Budget, and are therefore counted as government allocations. The year 2016 was an interim year – one financing period of the Structural Funds had just ended and the new period had not started yet.

Last year, 52% of R&D expenditure came from the business enterprise sector. Total R&D expenditure in the business enterprise sector was 139 million euros, from which 5% was received from the State Budget. The share of government funding in the R&D expenditure of the business enterprise sector has declined by almost a half over the past five years. In 2016, by economic activity, the share of government funding was the largest in professional, scientific and technical activities, as well as in construction (incl. road construction). 11 million euros of the R&D expenditure of the business enterprise sector originated from foreign sources. Labour costs accounted for 62% of the R&D expenditure of the business enterprise sector. The share of investments in the R&D expenditure was 13%.

Public financing of research and development, 2006–2016
Year Expenditure on research and development, million euros % from general government expenditure
2006 67.3 1.48
2007 79.3 1.43
2008 104.1 1.59
2009 96.4 1.48
2010 102.8 1.72
2011 125.9 2.02
2012 145.8 2.07
2013 154.0 2.11
2014 141.8 1.87
2015 140.4 1.72
2016 101.6 1.19

In 2016, the decline in the total R&D expenditure came from the non-profit institutional sector (higher education, government and non-profit private sector), where the R&D expenditure declined 20% compared with the previous year. As in the business enterprise sector, labour costs accounted for the greatest share of R&D expenditure also in the non-profit institutional sector (57%). The share of investments was 3%

The share of R&D expenditure in gross domestic product (GDP) amounted to 1.28% in 2016. According to Eurostat’s preliminary data, with this R&D indicator, Estonia retained its intermediate position among the EU Member States, although Estonia has moved away from the EU average quite a lot over the past four years.

In 2016, the number of persons employed in R&D calculated in full-time equivalents was 5,772, which is 2% more than the year before. The number of researchers and engineers calculated in full-time equivalents was 4,338, which is 3.6% more than in 2015. The increase in the number of full-time researchers and engineers came from the business enterprise sector, where this figure increased 14% compared to 2015. In the non-profit institutional sector, the number of researchers and engineers calculated in full-time equivalents declined by 0.5% over a year. In 2016, females accounted for 45% of the persons employed in R&D, and 41% of researchers and engineers.

Share of R&D expenditure in GDP, 2008–2016

For the statistical activity “Research and development”, the main representative of public interest is the Ministry of Education and Research, commissioned by whom Statistics Estonia collects and analyses the data necessary for performing this statistical activity.

Source: Statistics Estonia