Investor Presentaiton

21 A long track record of fiscal prudence Getting the deficit back to a low level is a priority for the new government • Estonia has a long track record of fiscal prudence, and is among the few EU member states never to have entered the Excessive Deficit Procedure of the EU's Stability and Growth Pact • The general government budget deficit was 1.0% of GDP in 2022, with tax collection better than expected in the high inflation environment, and is forecast to be 3.3% of GDP for 2023 (2024: 2.9%), with additional allocations to defence spending, to integrate refugees and to mitigate the impact of cost-of-living pressures on elderly people and families¹ • To reduce the deficit, the government has decided to increase income tax rates from 20% to 22% from Jan 2025, VAT rates were increased from 20% to 22% from Jan 2024 • Estonia places a high importance on fiscal transparency, meeting good or advanced practices on 27 out of 36 principles of the IMF Fiscal Transparency Code Budget deficits in 2012-2022 (% of GDP) 15 10 At 0.87% fiscal deficit average for 2012-2022, Estonia ranks amongst the most fiscal prudent Euro Area Member States Enhanced fiscal efficiency and transparency State Budget Act of 2014 formalizing the requirement to maintain a structural fiscal balance 2014 Budget Balance rule amendment allowing the government to budget structural deficits of 0.5% when equivalent previous surpluses were accumulated 2017 Performance-Based Budgeting reform aiming to reduce superfluous expenditure, enhance government efficiency and improve the quality of public services 2020* *From 2020-2023, the general escape clause of the Stability & Growth Pact (SGP) has applied - meaning that this principle is currently not followed in light of the current exceptional economic circumstances Tax ratio in 2022 (% of GDP) 37.5 38.5 40.3 41.0 35.3 -30.3 31.6 32.9 42.2 42.4 43.1 43.3 43.3 46.2 0 5 -5 2012 2013 2014 2015 2016 Estonia Slovenia 2017 2018 2019 Lithuania Czech Rep. 2020 2021 2022 Euro area Latvia Source: Eurostat Note: (1) The Ministry of Finance of Estonia, State Budget 2024, 27 September 2023 Latvia Lithuania Source: Eurostat Estonia Czech Rep. Slovenia Netherlands EU average Germany Sweden Denmark Finland Austria Belgium France REPUBLIC OF ESTONIA MINISTRY OF FINANCE

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