• The Ministry of Finance estimates that the general government fiscal position in 2016 was in nominal (0.3% of GDP) and structural surplus (0.7% of GDP)
• The Fiscal Council considers the structural position in 2016 to be in line with the State Budget Act
• Experience has shown that structural fiscal position estimates can change significantly later on

Under the European system of accounts (ESA 2010), which is the basis for the fiscal rules in Estonia and the European Union, the revenues of the general government exceeded spending by an amount equal to 0.3% of GDP. Tax revenues were still very good, despite slow economic growth. Labour taxes caused the tax income of the general government to rise nearly 6% in a year, which allowed increasing the general government current spending at the same rate.

The Ministry of Finance put the structural budget surplus for the general government at 0.7% of GDP in 2016. Although the numerical assessments of various institutions about the fiscal position differ, most of them indicate a structural fiscal position that is in balance or in surplus.

However, experience has shown that estimates about the state of the Estonian economy compared to its potential, and thus also about the structural fiscal position, can change significantly. This means that when planning fiscal policies, the estimate concerning the size of the structural surplus given in the consolidated report on the state financial year cannot be considered final.

All in all, the Fiscal Council finds the budget outcomes for 2016 to be in line with the fiscal rules.

The Fiscal Council's opinion and a more thorough explanatory report on the achievement of the general government structural budget position target in 2016 can be found here: 2016_structural_opinion.pdf

Additional information:
Raul Eamets
Chairman of Fiscal Council
Tel: 514 0082
Email: raul.eamets@ut.ee

Under the State Budget Act, the Fiscal Council must issue its opinion on the achievement of the target for the structural budget position after the government's consolidated report on the financial year has been published. Setting the budget targets for 2016 was based on the requirement that the budget for the general government be at least in structural balance.