Estonia nearly doubles growth forecast

TALLINN -- The Estonian government has drastically improved its forecast for GDP growth this year, increasing it to 7% from 4%. GDP growth was up by more than 8% year-on-year in the first two quarters of 2011.

Prime Minister Andrus Ansip told journalists that the improved growth outlook would be mirrored by slower growth rates next year.

"As this year's growth is stronger than expected" the Finance Ministry "will take that faster growth off of next year's forecast," Ansip told a news conference.

"Forecasts published yesterday by commercial banks concluded that this year's economic growth would be higher than expected, but next year the growth will start to decline. The Ministry of Finance is of the same opinion," he said.

The improved forecast comes amid and flurry of similar updates from major banks in the country. Nordea revised its 2011 growth figures to 7.5% from 5.7%, while Swedbank increased its forecast to 6.5%.