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Over EUR 175 million of the defence budget reached the Estonian economy in 2021

2. September 2022 - 13:32
Over EUR 175 million of the defence budget reached the Estonian economy in 2021.
Over EUR 175 million of the defence budget reached the Estonian economy in 2021.

In 2021, defence investments and economic expenditures by the Ministry of Defence totalled EUR 328 million, of which 53.5%, EUR 175.5 million, made its way back to the Estonian economy.

In total, Estonia’s defence budget for 2021 was EUR 645 million. Of the EUR 175.5 million that reached the Estonian economy, EUR 109.2 million was spent on investments and procuring equipment, and EUR 66.3 million on operating costs. In total, services and goods were purchased from 2231 Estonian companies and institutions.

“It is very important that more than half of the money we spend reaches our companies and our economy. In this way, we are supporting the defence industry as well as the local economy,” said Tiina Uudeberg, Undersecretary for Defence Planning at the Ministry of Defence.

Personal equipment was purchased entirely from domestic suppliers. A total of EUR 4.7 million was spent on the procurement of helmets, helmet covers, protective suits, boots and various uniform elements for regular and field uniforms, pockets and belts.

In terms of the total volume of infrastructure construction and real estate expenditure, 97%, EUR 53.7 million, was carried out by local companies. In 2021, the following important objects were completed: the sports facilities of the Defence Forces’ campuses and the universal halls built in Paldiski, Ämari, Tartu, Võru, and the Mine Harbour; the reconstructed old barracks and new barracks in Paldiski; the barracks for active servicemen in Tapa; shelters and storage facilities for equipment; the Keretu shooting range; and Vilbusuu Road, in Nursipalu.

A total of 90%, EUR 21.9 million, of vehicle maintenance and repair services were ordered from local companies. Estonian companies rebuild, maintain and repair CV90 armoured vehicles, SISU armoured personnel carriers, and wheeled vehicles.

Also, 87% of catering and food products were ordered from local suppliers. For example, the food served in the Defence Forces’ canteen is mostly made from local produce provided by Estonian companies.

There are facilities and real estate of agencies across Estonia that fall under the area of government of the Ministry of Defence. The work these properties require goes mainly to local companies and people, Uudeberg added.

Over the last three years, defence investments and economic expenditures amounted to just over EUR 1 billion. Of this amount, EUR 562.5 million has returned to the Estonian economy. A significant share of Estonia’s defence spending will continue to reach Estonian companies in the coming years.

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