Estonia’s government budget runs 0.3% of GDP surplus in 2016

The general government budget ran 0.3% of GDP surplus in 2016 compared to 0.1% of GDP surplus in 2015, according to data published by the stat office based on Maastricht criteria. This is noticeably better than the 0.1% of GDP deficit targeted by budget 2016. To note, the EC expected last year’s fiscal surplus to stand at 0.1% of GDP, while the IMF put the figure at 0.8% of GDP. The central government budget balance turned to a 0.1% of GDP surplus, whereas the surplus of local government narrowed slightly. General government revenues rose by 3.8%, underpinned by growth of tax intake, which in spite of the slower economic growth rose tangibly, underpinned by solid private consumption and better tax control. In the meantime, general government spending rose by 3.4% with the biggest growth recorded by social security funds expenditures which went up by 9.7% largely reflecting higher spending of the Health Insurance Fund. The central government expenditures rose by 2.7%, because the higher spending on goods and services and the payroll costs offset the lower capital expenditures.

The general government debt decreased by 3% to EUR2bn, amounting to 9.5% of GDP. The liabilities of both central government and municipalities dropped by 3%. Foreign debt accounted to slightly more than half of the central government liabilities, the stat office said.

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