Ministry Banking on Internal Demand for Economic Growth ({{commentsTotal}})

The Ministry of Finance is expecting the nation's economy to grow by 0.5 percent this year and 2.5 percent in 2015, with internal demand leading the growth.

Andrus Säälik, the head of the Fiscal Policy Department at the ministry, said the export figures have had a negative impact on economic growth for the past year. Although the ministry expects exports to pick up this year, import growth will outpace export growth. Internal demand will remain strong.

He said the figures take into account Russian sanctions against the food industry, but Russia's economy has been weak and demand dropping for Estonian goods before the sanctions were declared.

Inflation is predicted to be only 0.3 percent, far less than the 1.4 percent forecast in the spring. Inflation for next year will be around 1.9 percent, the ministry said today.

Unemployment is expected to drop to 7.5 percent this year and 6.8 percent in 2015.

The ministry said the budget deficit will be around 0.2 percent of GDP, increasing to 0.5 percent in 2015, although the state budget is expected to balance that in 2016.

State debt is expected to drop due to a lack of need for loans. The current level of 9.9 percent of GDP is predicted to drop to only 8.2 percent by 2018.