TALLINN, Sept. 24 (Xinhua) -- The Estonian government approved Wednesday the 2026 state budget with a deficit of 4.5 percent of gross domestic product (GDP).
In 2026, budget revenues are projected at 18.6 billion euros (21.8 billion U.S. dollars), expenditures at 19.5 billion euros, and investments at 1.3 billion euros.
The largest driver of spending growth is the increase in defense expenditures to 5 percent of GDP, which will require an additional 844.5 million euros.
According to the Fiscal Council, which operates under the Bank of Estonia and evaluates the budget, Estonia's public finances have worsened due to government policy. The council warned that such policies will lead to higher borrowing costs for both the public and private sectors.
The council's analysis further noted that the outlook for Estonia's public finances, as outlined in the 2026-2029 state budget strategy, has deteriorated following the budget discussions, Estonian Public Broadcasting reported.
The government is expected to submit the draft budget to Parliament by Sept. 30. (1 euro = 1.17 U.S. dollar) ■
