Prime Minister Michal: Agreement reached on budget prioritising defence, economic and income growth

Stenbock House, 18 September 2025 – The Estonian government has reached an in-principle agreement on the state budget for 2026. At least 5% of GDP will be earmarked for a surge in Estonia’s defence capabilities. In order to stimulate the economy there will be no increase in income tax, changes in which will leave around 780 million euros in the hands of people and businesses. Salaries will be raised among professions that are essential for the functioning of the state: teachers, police and rescue workers, and those employed in the field of culture.