Economic
High government deficit forecasted for Estonia through 2028
Estonia faces a large and persistent budget deficit driven by tax reforms and elevated defense spending, raising sustainability risks.
The Bank of Estonia projects that the general government budget will fall into a significant deficit next year, the largest in 30 years excluding the pandemic shortfall. The reform of the income tax system and defense spending rising above 5 percent of GDP are the main drivers of the worsening budget position. A substantial portion of defense expenditure will go toward imports, limiting its impact on domestic growth. The central bank warns that the deficit is expected to remain substantial through 2028 and that delaying the restoration of fiscal balance will make consolidation more difficult, potentially weighing on medium‑term economic performance.
- Status
- active
- Location
- Estonia
- Date added
- 2026-03-24 13:01 UTC
- Last updated
- 2026-03-24 13:01 UTC
- Source
- https://www.baltictimes.com
- Connected threats
-
- Not Available