NordenBladet —
Prime Minister Kristen Michal replied to the interpellation concerning economic growth (No. 831), submitted by Members of the Riigikogu Urmas Reinsalu, Mart Maastik, Helir-Valdor Seeder, Aivar Kokk, Riina Solman and Tõnis Lukas.
The interpellators pointed to the fact that the Government had predicted that economic growth this year would be 3.3% but, according to Statistics Estonia, the third quarter data told us that economic growth had been 0.9% based on third quarter data, and half of that was accounted for by tax increases, i.e. the increase in the price of production inputs. The interpellators wanted to know what the Government had done wrong that had failed to materialize that expectation of economic growth.
Michal noted that economic forecasts were prepared by specialists from the European Commission, the Bank of Estonia, commercial banks, and the Ministry of Finance based on the best knowledge. “The forecasts for the Estonian economy prepared by all institutions have been consistent. These are forecasts prepared on the basis of assumptions, and it is difficult to accurately predict whether they will come true,” the Prime Minister stated.
Michal said that, despite the difficult economic situation and an unpredictable future, the Estonian state and people had been resilient. “Expenditures have been lower than planned and the budget deficit has been smaller than expected,” Prime Minister explained. He recalled the preparation of the 2024 state budget when it had been forecast that the nominal budget deficit would be 2.9% of GDP. In fact, the deficit had amounted to 1.7% of GDP, which had been almost half the European Union average of 3.2%. A year ago, the Government drew up a budget for 2025, according to which the deficit would amount to 3% of GDP. As of the end of October this year, preliminary data indicate a deficit of 0.8% of annual GDP. It is highly likely that the deficit for 2025 will be significantly lower than planned.
Michal pointed out that the economy was very volatile worldwide. The level of the Global Economic and Political Uncertainty Index in April 2025 was the highest in the last 30 years.
“Despite this high volatility and uncertainty, the Estonian economy has returned to growth. GDP reading is positive for the third quarter in a row. This, in turn, is reflected in Estonians’ confidence indices this November. For example, the construction sector confidence index is the best indicator in the last 37 months, the service sector confidence index is the best indicator in the last 47 months, the consumer confidence index is the best indicator in the last 31 months, and the general economic confidence index is the best indicator in the last 41 months,” explained Michal.
According to the Prime Minister, the government is paying close attention to the economic environment. “Every two weeks, we hold an economic cabinet meeting where we discuss and make decisions that create an environment for long-term economic growth. In addition, we have established a business advisory council which helps reduce the bureaucracy and administrative burden that hinders economic development,” Michal said.
He noted that, specifically, they had taken the following steps to stimulate the Estonian economy. The first practical economic growth plan was completed in cooperation with entrepreneurs in 2025. In the previous cabinet meeting – on 11 December 2025 – the government already discussed the 2026 economic growth plan which brought together 23 different activities supporting the economy. The acceleration of plans has gained momentum; extensive reduction of bureaucracy is under way; we have launched a large-scale investment measure; we are promoting research and development which has been invested in very carefully in previous years; and we are improving the availability of labour. The long-term growth of the small Estonian economy depends on exports – they account for nearly 80% of our GDP. Therefore, an export action plan has been drawn up to help increase companies’ export capacity and reach new markets.
Prime Minister also replied to the interpellations concerning government spending (No. 832), Estonian citizens’ business ties with the Russian military industry and sanctioned individuals (No. 851) and the Government’s activities in protecting children and women against intimate partner violence (No. 856).
Minister of Finance Jürgen Ligi replied to the interpellation concerning the state budget strategy (No. 833).
Minister of Social Affairs Karmen Joller replied to the interpellation concerning the expansion of the rights of hospital pharmacies (No. 830).
Minister of the Interior Igor Taro replied to the interpellation concerning speed cameras (No. 846).
The interpellation concerning the state of dentistry in Estonia (No. 849), submitted to Minister of Social Affairs Karmen Joller, was removed from the agenda for the day at the request of the interpellators.
Vladimir Arhipov took the floor during the open microphone.
The sitting ended at 9.37 p.m.
Verbatim record of the sitting (in Estonian)
Video recording will be available to watch later on the Riigikogu YouTube channel.
Riigikogu Press Service
Gunnar Paal
+372 631 6351, +372 5190 2837
gunnar.paal@riigikogu.ee
Questions: press@riigikogu.ee
Link uudisele: Issues related to economic growth were discussed in the Riigikogu
Source: Parliament of Estonia