Budget, Estonia, Financial Services

The finance ministry had forecast earlier that the 2009 deficit could be around 2.6%. Ligi said that the fact that the deficit figure was even below 2% showed the effectiveness of the cost-cutting measures implemented by the state.

“Current budget deficit started last year falling in September and fell especially fast in December. The result shows that the cost-cutting measures implemented by Estonia wee even better than hoped,” said Ligi.

The finance ministry estimate isn’t what Brussels will use to establish whether Estonia is ready to adopt the euro. That figure will be revealed in less than a month by the Statistical Office. The minister stressed that the Statistical Office’s figure might be different from their since the Statistical Office takes into consideration the change of total GDP, for example.

Still, the finance ministry estimates gives hope that the final deficit figure will be below 3%.

Prime Minister Andrus Ansip said, commenting upon the initial estimate, that he sees a problem in the local municipalities budget deficit, which reached 1.4 bln kroons last year while Tallinn and Pärnu contributed a billion kroons of it.