Eesti Pank’s budget for 2016 will be 20.3 million euros, which is 1.4% more than the budget for 2015.

Without cash handling costs, which vary a lot from year to year, the budget will be 0.8% larger than in 2015.

“In organising our work we aim to be an efficient organisation, and we are moving in the right direction. The Eesti Pank budget has been growing at a slower rate than nominal GDP for five or six years now. The main growth in the central bank budget in recent years has come from personnel costs as we have to remain competitive in the labour market. If wages are rising by 5% in the sector we compete with, we can’t be left too far behind or else we would lose our experienced experts. We have mainly succeeded in raising wages through internal reorganisation, by looking for savings from other expenditure. Although the work of the central bank has increased in recent years, the number of staff here has not, and it has in fact fallen for several years”, said Ardo Hansson, Governor of Eesti Pank.

Figure. Eesti Pank expenditure and budget 2004-2016 in relation to GDP. The columns show the budgeted expenditure for 2015-2016 and actual expenditure for the preceding years.

Costs for services other than cash handling will rise 0.7% next year to 4.9 million euros. Eesti Pank has made savings from its administration and management costs and has increased spending on IT services, particularly joint IT projects with the central banks of the euro area.

Eesti Pank expects to employ 237.7 people next year, which is the same as in 2015. The central bank payroll will be 4% larger than in 2015 at 9.5 million euros. This will make salaries roughly comparable to those for similar positions in the financial sector in Tallinn, where Eesti Pank competes for employees.

Spending on training, business travel and office expenses will be reduced by 4.2% to 0.99 million euros. Eesti Pank is planning 530 business trips next year in connection with the European Central Bank, down from the 540 planned for this year.

Investments in fixed assets will increase in 2016 to 2.6 million euros. The central bank plans to continue next year with construction work on its external perimeter and to buy computer servers and network equipment. The largest development work is related to the system for collecting statistical reports, and development is also planned for administration and personnel software. The next wave of the research into the financial behaviour and consumption habits of Estonian households will start in 2016, and its costs will be spread over three years.

Eesti Pank’s forecasts show that the income for next year for the central bank will rise to 31.8 million euros. The largest share of Eesti Pank’s income comes from income related to the single monetary policy of the euro area. The bank also expects to gain income from management of foreign reserves and other operations. The bank is expected to make a profit of 11.5 million euros in 2016.

Background

Eesti Pank and the other central banks of the euro area are responsible for maintaining price stability in the euro area. To do this, Eesti Pank must be independent, and for this reason the bank is not covered by the state budget.

Eesti Pank aims to provide Estonian society with the highest possible quality of central banking services as efficiently as possible. One concern of the central bank is that costs should not rise as a share of GDP while the amount of work to be done remains the same. As cash handling costs can vary widely from year to year, they are not included in comparisons. The budget for 2015 was equal to 0.086% of GDP, but in 2016 it is expected to be 0.082% of GDP.

Eesti Pank’s operating revenues for 2015 will be published in the central bank's annual report in the first half of 2016. Reports for earlier years can be accessed from the bank’s website: http://www.eestipank.ee/en/publications/series/annual-report

For further information:
Viljar Rääsk
Public Relations Office
Tel: +372 668 0745, +372 527 5055
Email: viljar.raask@eestipank.ee
Press enquiries: press@eestipank.ee