Page 66 - CE Outlook Regions 2022

spending and updating the state apparatus are unavoidable, according
to the government.
The general government debt burden will be €6.36bn in 2022, or 19.7%
of GDP, which is some 5 percentage points less than estimated in the
spring.

The Estonian government debt to GDP is projected to trend around
23% in 2022, according to econometric models. External debt in
Estonia decreased to €25.75bn in the third quarter of 2021 from
€26.25bn in the second quarter of 2021.

Fitch Ratings forecasts Estonia's gross general government debt
(GGGD)-to-GDP to increase to 19.6% in 2021 as a result of wider fiscal
deficits associated with the coronavirus shock. On a net basis, general
government debt is even lower, at 8.5% of GDP given the large
accumulation of deposits that increased further during the crisis.
Estonia's external position remains favourable, as reflected in the net
external creditor position forecast at 20.5% of GDP in 2021.
Fitch Ratings has recently affirmed Estonia's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'AA-' with a stable
outlook.

4.3 Budget and debt - Hungary

Despite a strong rebound in economic activity, the general
government deficit is set to reach 8% of GDP in 2021, close to
the same levels as during the pandemic.

Hungary’s budget deficit hit a historic high of HUF1 trillion in
November and HUF4 trillion by the end of the month, which was
more than 2.5-fold higher than the initial target. The government
blames the delay in EU transfers partly for the record budget
shortfall, and says the stimulus is necessary for jumpstarting the
economy.

Stronger-than-expected revenue growth was matched by new
expansionary measures, generous family benefit programmes
and a stimulus to kickstart the economy.

The government is committed to bringing down the budget gap to
3%, but will take a gradual approach so as not to risk slowing the
economy too much, according to Hungarian Finance Minister

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