Government slashes economic forecast

Estonia’s annual state budget for next year was under discussion today at the government meeting, for the first time. The Prime Minister confirmed that the government has slashed the country’s economic forecast.

In spring, the Estonian Finance Ministry predicted 2.0 percent GDP growth for the country in 2014, and 3.5 percent in 2015.

Today Prime Minister Taavi Rõivas acknowledged that these numbers would be unachievable. The new forecast expects just 0.5 percent GDP growth this year and 2.5 percent next.

Rõivas conceded that many decisions in regards to next year’s budget were already agreed upon between the governing parties – the Reform Party and the Social Democrats – while preparing the current coalition agreement in spring this year.

"Next year’s budget will increase by 4.5 – 5 percent. We will have the exact numbers once we have agreed upon them," the Prime Minister said.

Estonian Finance Ministry will publish the updated economic forecast in its entirety on Monday.