NVDA Q3 Earnings Alert: Why our AI stock picker is still holding Nvidia stockRead More

UPDATE 2-Estonia sees 2010 drop at 0.1 pct, upbeat on euro

Published 01/28/2010, 08:35 AM
Updated 01/28/2010, 08:39 AM

* Estonia sees return to growth in 2011

* Budget deficit to stay under EU levels

* Considers borrowing to finance deficit (Adds details of other forecasts, minister comments)

TALLINN, Jan 28 (Reuters) - The economic slide of euro hopeful Estonia will brake this year and recovery will come in 2011, the Finance Ministry said on Thursday, repeating that the conditions to adopt the single currency were met in 2009.

The ministry said in its medium-term fiscal report to the European Union, the convergence report, that it had revised its forecasts for 2010 to show a contraction in the economy of 0.1 percent rather than the previously forecast fall of 2.0 percent.

"In 2011 we expect a recovery in economic growth (3.3 percent) which is based most of all on exports," it said, also forecasting gross domestic product (GDP) expansion of 3.7 percent in 2012 and 4.0 percent in 2013.

Estonia has been in a deep recession since 2008, but has adopted tight fiscal policies to keep its public sector budget deficit under 3 percent of GDP to meet the Maastricht criteria and join the euro zone from 2011.

"The convergence programme says Estonia meets all the conditions necessary for the introduction of the euro currency in 2011," the ministry said.

The programme forecast a budget deficit of 2.6 percent of GDP in 2009, 2.2 percent in 2010, 2.0 percent in 2011 and 1.0 percent in 2012 before returning to a small surplus of 0.2 percent of GDP in 2013.

Finance Minister Jurgen Ligi said the government was still considering ways to finance the deficit.

"We have not made a decision on how to finance the deficits, but we are looking at not depleting all our reserves and for this year we will use 50/50 (reserves and borrowing)," he told Reuters after a news conference on the report.

He said the government was considering borrowing from banks.

Estonia has one of the lowest debt levels in the EU, but the convergence report forecast it to rise from 7.8 percent of GDP in 2009 to 14.3 percent in 2013. (Reporting by David Mardiste; editing by Stephen Nisbet)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.