Estonian first-quarter budget gap shrinks 34%
25.06.2010, 14:27Estonia’s budget deficit shrank by a third in the first quarter from a year earlier as the economy recovers from the third-deepest recession in the European Union, reported Bloomberg.
The shortfall, which includes central and local governments and social insurance funds, narrowed 34 percent to 4 billion kroons from 6.1 billion kroons a year earlier, according to Statistics Estonia. The first- quarter deficit amounts to 1.9 percent of the planned gross domestic product, according to Bloomberg calculations based on the Finance Ministry’s 2010 estimate.
Estonia won European Commission backing last month to become the euro area’s 17th country after outperforming the bloc’s members on the Maastricht Treaty fiscal criteria. The government’s expects the deficit to widen to 2.5 percent from 1.7 percent last year when the government ran surpluses in the second half by cutting wages, freezing pension contributions and raising dividend collection from state companies.
“Due to the elections, we do not see any improvement in the cumulative deficit from current levels,” Nordea economist Annika Lindblad in Helsinki said before the report. “Risks are currently rather for a slightly higher than anticipated deficit of 2.5 percent of GDP, although still remaining below 3 percent of GDP.”
The budget deficit after the first four months of the year was 2.39 percent of annual GDP, the country’s Finance Ministry said in an e-mailed statement earlier this month. Elections are due on March 6, 2011.
--Editors: Balazs Penz, James M. Gomez.
To contact the reporter on this story: Ott Ummelas in Tallinn at +372-663-1128 +372-663-1128 or oummelas@bloomberg.net
To contact the editor responsible for this story: Willy Morris at +44-20-7673-2254 +44-20-7673-2254 or wmorris@bloomberg.net
KEYWORDS: 000050NODE; 2500; BALTIC; BNALL; BNSTAFF; BNTEAMS; BUD; E-EEU; ECO; EEU; EM; ESTONIA; EUROPE; EUROPEME; EUROSTORY; FINNEWS; GOV; GOVME; NEWSWORD07; ORIGINAL; STFILT241; STFILT266; STFILT268; WEHEADERS
SLUGLINE: BC-ESTONIA-DEFICIT-Q1
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