Estonian Central Bank improves growth forecast

TALLINN -- The Estonian Central Bank has yet again improves it's growth forecasts for the next three years as the country's economy continues to recover at faster than expected rates.

"The Estonian economy has exited recession and started growing, mainly on the back of exports. Estonia's economic recovery has been supported by our trading partners' faster-than-anticipated growth in the first half of the year," the central bank said in a Sept. 29 press release.

The new forecasts predict GDP growth of 2.5% this year, 4.2% next year adn 3.8% in 2012 -- a respective increase of 1.5%, 0.1% and 0.5%. The forecasts are also larger than figures released by the finance ministry last month.

The bank said it would still have to take measures to ensure that growth remained strong.

"In order to restore fiscal surpluses, it is necessary to use growth-induced additional tax revenue for curbing the deficit and not for increasing expenses," the bank said. "It is important to determine... if it is necessary to reduce taxes in order to support the growth potential."