According to the preliminary data of Statistics Estonia, in 2014, the Estonian general government surplus was 0.6% and the gross debt level was 10.6% of the gross domestic product.
At the end of 2014, the total revenues of the general government exceeded the expenditures by 112.7 million euros*, accounted as the Maastricht deficit criteria. Both the balance of the central government and those of local governments improved. By the end of 2014, the surplus of revenues of the central government sub-sector was 55 million euros*. The deficit of the local government sector decreased over the year, amounting to a deficit of only 4.5 million euros at the end of 2014. The budget surplus of social security funds was 62.2 million euros, remaining on the same level as in 2013.
The consolidated debt of the general government (Maastricht debt) amounted to 2.1 billion euros by the end of 2014, having risen 10% compared to 2013. The local governments as well as the central government contributed to the growth of the debt level. The loan liabilities of the central government rose by 11%, while the volume of long-term securities issued by the public-legal institutions and foundations belonging to the central government decreased by 28%. The share of foreign debt in the central government’s loan liabilities was nearly 84%.
The Estonian involvement in the European temporary rescue mechanism, EFSF (European Financial Stability Facility) increased by 26.4 million euros in 2014. At the end of 2014, the liabilities towards the EFSF totalled 485 million euros, 81% of which went for the participation in the rescue package for Greece, 12% for Portugal and 8% for Ireland.
The overall debt level of the local governments grew by 12% compared to 2013 and nearly a quarter of the loans were financed by foreign capital. While the volume of long-term loans increased 13% over the year, the volume of short-term loans decreased nearly three times. The volume of the securities other than shares increased 8%. As at the end of 2014, social security funds did not contribute to the debt of the general government sector.
* Unlike earlier years, the results of the economic activities of central stockholding agencies and deposit guarantee funds are now added as estimations to the central government balance according to Eurostat’s decisions on accounting harmonisation. The corresponding recalculations will be published in the Statistical Database of Statistics Estonia together with the results of regular revisions in September 2015.
In Estonia the general government sector comprises three sub-sectors: 1) central government (state budget 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).
Source: Statistics Estonia
The flash estimate put the Estonian current account at 55 million euros in surplus in January 2015. Exports of both goods and services were up on a year earlier, but import volumes were smaller than in January 2014. The smallest deficit on the goods account in recent years and an increased surplus in services turned the current account balance to surplus.
The total balance of the current and capital accounts was also positive. This means that the Estonian economy was a net lender to the rest of the world at the start of this year, so all the economic sectors of the economy taken together invested more resources abroad than they received from there.
See more on the Bank of Estonia website
According to the Ministry of Finance, the state raked in 7.82 billion euros and spent 7.77 billion in 2014, which means the planned deficit turned into a surplus.
Revenues were up by 206 million euros compared to the previous years, while spending only grew by 36 million. The state expected 8.02 billion in revenues and 8.18 billion in spending.
The growth was led by tax takings, which were up by 8.2 percent, reaching 6.64 billion euros. The shortfall came in the non-tax revenues, with the state only collecting 83.6 percent of the budgeted non-tax revenue.
The state took in 330.8 million euros less in outside support compared to 2013 as many projects were pre-paid in 2013 and the EU’s budget period changed.
Financial profits more than doubled to 184.9 million euros, but still did not reach the level expected in the 2014 budget.
In the spending department, the state spent 100 percent what it promised on staff and running of the state apparatus, but made significant cuts in the investment department, spending 438.6 million euros, or only 64 percent, of what was initially planned. The total amount of investments decreased by 36.6 percent, mainly due to the EU switching over from the 2007-2013 budget period to the 2014-2020 period. Estonia did not fully benefit from the new period, while struggling to spend the balance from the previous budget period.
Source: ERR News via Estonian Review
Edgar Savisaar, chairman of Estonia’s largest opposition party, writes in Äripäev that he has an economic plan that will make Estonia’s economy to grow 2 to 3 times faster than the EU average.
If we want to show that we are not a dying-out, sad and angry small country, but a terrific country that has open society, dynamic business climate and is innovative, the first step is to remove the Reform Party from power, he writes.
Read more from BBN
Mart Laar, ex-PM and current supervisory board chairman of Estonian central bank, has come up with his own ideas of what kind of reforms Estonia needs, writes Äripäev.
Laar who said at the end of last year that he was going to unveil his reform proposals at the start of 2015 and that it was time for radical changes.
Read the key points of Mart Laar’s economic reform plan from BBN.
Oversight committee on funding of political parties has issued a precept to Centre Party chairman and Mayor of Tallinn Edgar Savisaar, demanding that he repays 113,000 euros in taxpayer funds used to pay for Savisaar’s ads ahead of local elections in 2013, writes Postimees.
The committee investigated and determined that “Tallinn moves” outdoors ads which featured Savisaar and cost roughly 100,000 euros, a Russian-language TV video clip aired in PBK that cost about 8,500 euros and the ad on opening of Hiiu stadium were actually ads advertising Savisaar.
Read more from BBN