TALLINN, May 13 - Estonia will not seek to borrow more funds to shore up its budget position, the Estonian Prime Minister said on Wednesday as the government tries to find 5.5 billion Estonian kroons ($480 million) in savings from its state budget.
The Estonia's gross domestic product (GDP) fell 15.6 percent in the first quarter of 2009 according to a flash estimate from the statistics office, affecting the country's ability to manage its budget as revenue collection slows and the forcing government to make tough budget cuts.
"I don't think so," said Estonian Prime Minister Andrus Ansip said in an interview to Reuters Television when asked if the country would seek to borrow more to cover its budget position.
The government has already said it had decided to apply for
loans worth up to 6.5 billion kroons from Swedbank
"We would like to keep our expenditure under control. This means that the three percent of GDP deficit level is the maximum for us," Ansip added.
The Estonian coalition government has been meeting for several weeks to find more savings in the state budget. The current round of budget cuts worth 5.5 billion kroons is the second for the 2009 budget after cutting 8 billion kroons from the budget in February.
The prime minister was optimistic that the budget talks will help the country to its goal of joining the euro zone as has set January 1, 2011 as its target date for membership.
"I am sure we will reach this Maastricht criteria level," Ansip said.
As for the sharp fall in GDP, Ansip said, "hopefully the decrease this year will be less than that 15.6 percent, but the results are more or less in accordance with the forecasts".
The Estonian finance ministry said that the first quarter of 2009 may be the low point for the economy and the speed of declines in economic growth may slow in the rest of the year. (Reporting by David Mardiste; Editing by Andy Bruce)