IMF: Estonia's economic success is accompanied by risks

The International Monetary Fund (IMF) has prepared a statement expressing the Executive Board's view on Estonia's economic position and outlooks. The Executive Board based their discussion on the report compiled by the IMF staff visit to Estonia in August 2006. The report will be published on the IMF web page on 29 November 2006.

"The IMF provided a positive evaluation of Estonia's economy. The Fund notes that the reliable currency board arrangement and prudent fiscal policies have brought about price stability and low public debt," commented Governor of Eesti Pank, Mr Andres Lipstok.

"Like emphasised in Eesti Pank's autumn forecast, the IMF, too, observed several risks to Estonia's economy, including economic overheating, which manifests itself in tightening labour markets, rising inflation, and a wide current account deficit," Lipstok added.

The Fund also said a short-term delay in the changeover to the euro does not constitute a threat to Estonia, whereas an open-ended delay should be avoided.

The report is based on the IMF staff team's visit to Estonia from 15 to 25 August, in the course of
which annual economic policy discussions were held with representatives of the state and private sector. The IMF's statement is available on the Fund's web page at www.imf.org and on the web site of Eesti Pank at http://www.bankofestonia.info/pub/en/majandus/IMF/hinnangud.html.