Estonian government reaches accord on budget cuts

Telco

Estonian government ministers have reached agreement in principle to make 3.1 billion kroons ($310 million) of spending cuts to the state budget, the finance ministry said on Friday.

The Estonian government has been under scrutiny for its ability to keep its state budget at least in surplus as economic growth falls faster than expected and after the finance ministry cut its economic forecasts for 2008. The ministry said in a statement that the agreement was reached late on Thursday night, but added that on Friday the ministries have to find another 100 million kroons to cut from their own budgets to reach the 3.1 billion target.

With the agreed cuts Estonia budget expenditure will total 88.2 billion kroons, and according to the revised finance ministry forecasts issued in April, the cuts should bring the budget back into balance. The finance ministry forecast earlier that GDP growth will fall sharply to 3.7% this year, down from a previous forecast for 2008 of 5.2% growth and well below 2007’s 7.1% expansion. The slowdown is due to lower domestic demand due to tighter credit and falling property prices in a weakening global environment. The government had planned a government sector budget surplus this year of 1.3% of GDP, or 3.6 billion kroons. The finance ministry said it plans to send the budget cutting bill to parliament for approval on May 15. (Reuters)

ADVERTISEMENT

Századvég raises GDP forecast to 7.8% Analysis

Századvég raises GDP forecast to 7.8%

Opposition parties to begin PM candidate primaries Elections

Opposition parties to begin PM candidate primaries

New editor-in-chief at Betone Studio Appointments

New editor-in-chief at Betone Studio

BFK developing regional cycling strategy City

BFK developing regional cycling strategy

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.