Minister of Finance: Cuts would hinder Estonia’s economic recovery

The Estonian economy is coping better than anticipated in the spring, Minister of Finance Martin Helme (EKRE) said on Monday, and the government is not planning cuts as it would slow down the country’s economic recovery.

In the spring, at the height of the emergency situation, several forecasts predicted Estonia’s GDP would fall by between 10 and 14 percent this year. But the Ministry of Finance is summer forecast expects -5.6 percent and real growth -5.5 percent this year.

The forecast is based on the assumption that no new movement restrictions will be imposed and that the coronavirus will be under control in a year’s time.

Helme said Estonia has done better than expected. However, according to him, the current forecasts are not very accurate. “Predicting in April or March what will happen in 2021 was…some numbers were put on paper [but] it was practically impossible. What can be said, calmly, is that the debt burden is lower than the forecast made in the spring, tax revenues are better, unemployment is lower,” he said at a press conference.