The Edinburgh International book festival hopes a swathe of Booker prize winners, political leaders and a guest appearance by Greta Thunberg will help restore its finances after a “traumatic” fall in sales last year.

The world’s largest book festival celebrates its 40th anniversary in August with events featuring Katrín Jakobsdóttir, the Icelandic prime minister, the former Booker prize winners Ben Okri and Anne Enright, and the International Booker winners Georgi Gospodinov and David Diop.

Thunberg is speaking at the 3,000-seat Playhouse theatre to discuss her appeal for climate action, It’s Not Too Late to Change the World, as part of a series of “climate positive” events at this year’s festival.

The festival has been forced into a series of emergency fundraising and cost-cutting measures after it miscalculated the continuing impact of the Covid crisis on its audiences last year.

Nick Barley, who is curating his last book festival after 14 years in charge, said ticket sales last August were well below forecasts. The day before it opened, Salman Rushdie was attacked at an event in New York state, there were bin strikes in Edinburgh and rail strikes heavily cutting services.

The fall in ticket sales forced Barley to appeal to private donors to ensure the event met its debts, while laying off seven members of staff, cutting its programming and dropping its previous collaborations with theatre companies to ensure it could break even.

The festival has also contracted out its bookshop, a mainstay of its tented village in the city’s New Town, to Waterstones as a cost-saving measure.

“It was traumatic,” Barley said. “So to make sure that the 2023 budget stacks up, we had to be very, very draconian in our budgeting. Which was tough.”

This year’s festival will still feature nearly 600 events involving 470 authors and opinion formers, Barley said. They will include three authors who appeared at the first book festival in 1983: Michael Rosen, Alistair Moffat and AN Wilson.

That is considerably less than the 900 events it staged in 2019, the year before the Covid crisis led to all of Edinburgh’s festivals shutting down in 2020. The fringe and international festivals are also smaller this year. Even so, Barley is optimistic.

He said: “All of the evidence seems to be that we will sell more tickets this year. And therefore if we do, the book festival will make a good surplus this year, to further build its reserves.”

Despite decisions by the fringe and international festivals to heavily curtail their online output, about 100 book festival events will be shown live online.

Barley said streaming had significantly expanded its reach globally and its social demographics, enabling many people unable to reach Edinburgh or afford tickets to watch events. “I think it’ll be reckless of us to throw that away,” he said.

The festival left its traditional Charlotte Square venue in 2021 for Edinburgh College of Art due to the significant cost uncertainties during the Covid crisis. It moves next year to a new permanent venue hosted by the University of Edinburgh at its Futures Institute, adjacent to the city’s busiest fringe venues – which is expected to allow it to significantly expand.

Tickets for this year’s event, which runs from 12 to 28 August, go on sale on 29 June.