Finmin describes Estonia's 2014 budget as moderately conservative

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Photo: Toomas Huik

The Estonian government at its extraordinary Cabinet sitting on Tuesday continued discussion of the draft of the state budget for 2014, which Finance Minister Jurgen Ligi described as moderately conservative.

«The priority as far as major extra expenditures go are still wages and pensions. Raising the tax-free part of pension to 210 euros is something we can handle, that's not a problem,» Ligi said in his commentary to BNS in the evening.

He said the size of the budget should be final by now. «Unfortunately the opinion comes up once and again that the budget should be bigger, but you have to plan revenues realistically,» he said.

The minister said the increase in the size of the budget can be attributed to the government's activity in combating tax fraud. «First and foremost it's VAT that poses a problem, and fuel excise duty to a certain degree,» he said.

The volume of Estonia's state budget will grow by more than 400 million euros or 5 percent compared with the budget for the current year, Prime Minister Andrus Ansip said at the government's press conference last week. He said that cover for a pension rise of 5.8 percent is ensured.

The public sector wage growth was agreed upon at 5.1 percent, but the figure may change as ministers can differentiate it within their area of governance, the prime minister added.

The current year's budget revenues are projected at 7.5 billion euros and expenditures at 7.7 billion euros. The deficit of the general government budget is expected to reach 0.7 percent of gross domestic product.

The Finance Ministry said in its summer forecast it expects the economy to expand by 3.6 percent in 2014.

The government expects to give its final nod to the budget bill on Sept. 24 and to formally hand it to lawmakers on Sept. 26.

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