Estonian General Government Budget Deficit in 2009 Clearly Below 3% of GDP

Estonian General Government Budget Deficit in 2009 Clearly Below 3% of GDP
5. 03. 2010
 

According to preliminary data, the Estonian general government budget position in 2009 remained within the limits of the Maastricht criteria. Data by the Ministry of Finance indicates that the general government accrual budget deficit amounted to 3.7 bln EEK or 1.7% of GDP, in 2009. 
 
The general government budget deficit started to improve in the second half of 2009, the biggest decline in deficit occurred in December. Jürgen Ligi, the Minister of Finance, stated that the achievement is a result of continuous work in the Ministry of Finance on risk management. “At the same time such a good result is not achieved alone by the government or one ministry, but with an effort by all of the society. In difficult times Estonia has shown remarkable strength in cooperation and budget consolidation. This stands out in the international arena”, said Ligi.
 
The achievement in 2009 was by no means a final goal in Estonian fiscal policy. “Although the deficit of 1.7% of GDP is going to be much lower than in most European countries, it is still a deficit. The expenditure still exceeds the revenues and this situation can not be sustained for a long period”, said Ligi. “Estonia has to restore the budget surplus in the coming years”.
 
The inflation in November last year was lower than the Maastricht criteria and this situation is expected to continue during 2010. The Maastricht criteria on general government debt and exchange rate are met since establishing the euro.
 
The current general government deficit figure is an assessment made by the Ministry of Finance, based on preliminary data from the state’s accounting records. Final data, which is also a basis for official evaluation of the fulfillment of the Maastricht criteria, will be published by Statistics Estonia in 26th of March.