Estonian parlt's state budget control select committee to discuss summer economic forecast

TALLINN – The state budget control select committee of the Estonian parliament is to hold a public sitting on Wednesday morning to discuss the summer economic forecast of the Ministry of Finance, which serves as the basis for drawing up next year's state budget and the state budget strategy for the next four years.

Committee chairman Tonis Molder said that, due to high inflation, the government the government has started preparing the state's budget strategy and the state budget for 2023 in a difficult economic situation, which is also affected by Russia's war in Ukraine. "We expect a comprehensive overview of the economic forecast, including the prospects of the Estonian economy and the revenues and expenses of the government sector. We also wish to discuss the objections of the Fiscal Council," he added.

The Fiscal Council announced on Tuesday that it does not approve the Ministry of Finance's summer 2022 economic forecast, as, according to the Council, it has been prepared using outdated assumptions about the growth of government expenditures. Firstly, according to the Fiscal Council, the summer forecast is based on projections for general government consumption and wage costs from the state budget strategy of a year and a half ago, the assumptions of which have become obsolete in the context of rapid inflation. Secondly, the forecast does not take into account the planned spending measures of the new government coalition, the content of which was made public in July. The Fiscal Council recommends that the state budget strategy for 2023-2026 also include an updated macroeconomic forecast.

Invited to the sitting of the select committee are Raoul Lattemae, head of the fiscal policy department of the Ministry of Finance, Kadri Klaos, head of the service for state finances at the Ministry of Finance, Raul Eamets, chairman of the Fiscal Council, and representatives of the National Audit Office.

The public sitting of the committee started at 9 a.m. and can be viewed online.