Bank of Estonia economist Lauri Punga, commenting on the government’s budget proposals, said that looking at the forecast for the coming years, there is reason to be concerned about the long-term health of the country’s public finances. He stressed that the budget will remain deep in deficit and that the debt burden will continue to grow.
The Ministry of Finance presented its summer economic forecast on Tuesday, giving both the Reform Party and Eesti 200 the basis to consider scrapping several previously planned tax hikes.
Prime Minister Kristen Michal (Reform) has said the government could drop the planned income tax increase set for next year, which was expected to bring more than €200 million into the budget. He also said the public sector could raise wages, which would cost nearly €100 million.
Kristina Kallas, leader of Eesti 200, said on Wednesday morning that her party will propose to its coalition partner that the vehicle tax also be abandoned. That would mean about €100 million less in revenue for the state.
ERR journalist Johannes Voltri asked Bank of Estonia economist Lauri Punga for his assessment of the government’s proposals.
More read: ERR.EE
