Bloomberg News

IMF Sees Estonia’s Economic Growth Slowing to 3.1% in 2012

November 29, 2011

Nov. 29 (Bloomberg) -- Estonia’s economy will slow next year as export growth decelerates and business and consumer confidence ebbs because of Europe’s sovereign debt crisis, the International Monetary Fund said.

The Baltic nation’s economy may expand 3.1 percent in 2012 after growth of 7.5 percent this year, the Washington-based lender said today in an e-mailed statement. Inflation will probably average 3.1 percent next year, slowing from 5.1 percent in 2011, it added.

Estonia is the fastest-growing country in the 27-member European Union this year on higher export demand among its main trading partners, Sweden and Finland. Its $19 billion economy, which adopted the euro in January, the first former Soviet republic to do so, faces faltering foreign demand toward year- end as the global economy slows, the European Commission said Nov. 10.

“Estonia faces an increasingly challenging environment as it looks to continue implementing policies preserving macroeconomic policy credibility and safeguarding sustainable growth,” the IMF wrote in the statement. “Estonia’s fiscal position will remain strong but there will be a need to limit the stimulative impact of the 2012 budget.”

The IMF’s growth forecast compares with the Finance Ministry’s estimate of 3 percent expansion and the Organization for Economic Cooperation and Development’s 3.2 percent projection. Stockholm-based SEB AB last week reduced its 2012 growth outlook to 2 percent from 3.5 percent.

--Editors: Andrew Langley, Alan Crosby

To contact the reporter on this story: Ott Ummelas in Tallinn at oummelas@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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