Economic
Estonia faces largest budget deficit in 30 years as stimulus fades
Bank of Estonia warns that the 2027 general government budget deficit will be the largest in 30 years as fiscal stimulus wears off, jeopardizing fiscal balance and public debt stability.
The Bank of Estonia's latest forecast indicates that rapid economic growth in 2026 will be accompanied by a sharp deterioration in public finances. With increased government spending and tax cuts boosting demand, the central bank expects Estonia's general government budget deficit to widen significantly in 2027, marking the largest deficit in three decades excluding the pandemic year 2020. The bank warns that delaying the restoration of fiscal balance and stabilizing public debt could make the eventual correction more painful, as rebalancing the budget would temporarily slow economic growth and increase financial vulnerability amid lingering geopolitical uncertainty.
- Status
- active
- Location
- Estonia
- Date added
- 2026-03-24 13:13 UTC
- Last updated
- 2026-03-24 13:13 UTC
- Source
- https://www.delfi.ee
- Connected threats
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- Not Available