Ministry forecasts 2.2 percent GDP growth ahead of state budget finalizing

FInance ministry building in central Tallinn.
FInance ministry building in central Tallinn. Source: Siim Lõvi /ERR

The finance ministry has predicted a 2.2 percent growth in Gross Domestic Product for the next year, with nominal economic growth, including inflation forecast for 5.1 percent.

The ministry's summer economic forecast, key in drawing up 2020's state budget, due in late September, is to be formally presented on Monday, ERR's online news in Estonian reports.

The Ministry of Finance's spring economic forecast predicted next year's economic growth at 2.7 percent and inflation at 2.2 percent, a nominal growth of 4.9 percent.

Whereas the previous ministry forecast in the spring, while GDP growth was forecast a big higher at 2.7 percent, had shown a slowdown in tax revenue growth, causing the government to cut back on a number of expenditures in its provisional budget plan for 2020 and implement some stronger austerity measures. The latest forecast should be the proof in the pudding as to whether the coalition can budget for any additional costs.

Recent comment from both the ministry and the prime minister himself have said that there may be scope for increased expenditure in some areas, but a general tightening of belts is on the cards.

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Editor: Andrew Whyte

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