OECD Projects 3.6% Growth for 2013
Estonia will have the EU's fastest growing economy next year, according to the spring forecast from the Organization for Economic Cooperation and Development (OECD).
The growth rate for 2012 will be 2.2 percent, said the OECD, while in 2013 growth will reach 3.6 percent.
That is 0.5 and 0.6 percentage points higher than the Ministry of Finance's latest forecast for this year and next.
However, the OECD had initially said that the Estonian economy would grow by 4.7 percent in 2012, which it then pared down to 3.2 percent in autumn. That reflects an increasingly less favorable global outlook.
The OECD said the external environment - the Eurozone's economy will shrink 0.1 percent this year and grow just 0.9 percent next year, according to the forecast - was the primary risk to growth. An increase in oil prices would be another, it said.
"The OECD's positive assessments and forecast spell relief on the background of general insecurity," said Finance Minister Jürgen Ligi. "We, too, are aware that the external environment is our primary risk, but we depend most directly on the Nordics, and the resistance of their economies is more secure than for Europe as a whole."
The organization recommended that Estonia establish budgetary rules for fiscal discipline and continue increasing active labor market measures for combating long-term unemployment.
The OECD praised Estonia for the rapid reduction in unemployment, the fact that the employment rate exceeds the pre-boom level, and the continued high rate of private investments. The Estonian budget is still one of the most sound among OECD members, it said.
Kristopher Rikken