At the end of June, the public sector budget deficit reached 629 million euros, i.e. 1.6 percent of the expected annual GDP, while compared to the beginning of last year, the deficit was 238 million euros higher due to a weaker budget position at all levels of the public sector. :format(webp)/nginx/o/2023/09/22/15609035t1h7961.jpg)
Empty wallet. Illustrative photo Photo: Unsplash
At the end of June, the public sector budget deficit reached 629 million euros, i.e. 1.6 percent of the expected annual GDP, while compared to the beginning of last year, the deficit was 238 million euros higher due to a weaker budget position at all levels of the public sector.
As Helin Kütt, an analyst at the Finance Ministry's fiscal policy department, said in a press release, the central government's deficit reached 706 million euros by the end of June, which is 134 million euros more than in the same period last year.
"The deficit is caused by a slowdown in tax revenue growth, a decrease in non-tax revenues, and a rapid increase in investment and management costs, which are mainly due to the purchase of defense equipment. In June, the growth of tax revenues slowed down mainly due to a decrease in excise collection, as previously acquired shares were sold after the excise rates were increased. However, the total amount of tax paid to the budget is higher than planned, mainly due to income tax from individuals and legal entities. On the other hand, non-tax revenues are falling short of the owner's income, as well as a decrease in revenue from CO2 emissions as a result of the fall in the price of a unit of CO2," the analyst explained.
According to her, the financial situation of the social insurance funds has improved slightly, and by the end of the half-year they have almost reached balance. The health fund deficit of five million euros at the end of June is noticeably worse than a year earlier at the same time, when the surplus was 68 million euros, but the situation has improved compared to previous months. First of all, costs have increased sharply, and this is due precisely to the significantly increased salaries of the last medical workers on the basis of a collective agreement.
By the end of June, the Unemployment Insurance Fund had achieved a surplus of two million euros from a deficit at the beginning of the year, a trend similar to the last few years. The year usually begins with an increase in the cost of benefits, but unemployment benefits do not make such a jump. The number of registered unemployed people at the end of June fell below the level of the previous year and shows signs of further decline.
The local government surplus fell to 81 million euros by the end of June, 27 million euros less than at the beginning of last year.
