estonian euro adoption will have massive impact on property market
News Posted On: 27 November 2009
Estonia will be the next country to adopt the Euro, according to World Bank officials. The Baltic state's fiscal prudence over the years is now causing it to recover faster that neighbouring Latvia and Lithuania, whilst still keeping its budget deficit below 3% as stipulated for countries wishing to adopt the Euro.
Euro adoption will have a massive impact on Estonia's economy and its property market. It is entirely plausible that we will witness a buying spree in Estonia next year, as overseas property buyers attempt to get in before the euro ups prices.
“It’s doing everything it can to keep the deficit within 3 percent of GDP this year,” Thomas Laursen, the World Bank’s country manager for Poland and the Baltics, said in an interview in Warsaw. “Estonia will be the next country to adopt the euro.”
Estonia has put Euro adoption above all else when it comes to the economy; cutting public spending, which exacerbated the second-deepest recession in the EU, in order to cut 9% off its budget deficit. The hope is that Euro adoption will boost investment and support trade sufficiently to make it all worthwhile.
Estonia's budget deficit is forecast to be 2.85% this year and 2.95% next year, and most economists, expect that euro adoption will proceed as targeted in January 2011, including the World Bank, the International Monetary Fund and senior players in the international banking sector.
Whilst Estonian has faced difficulty in keeping its budget deficit below 3%, it has had no difficulty keeping debt below 60% of GDP. Estonia's fiscal debt is the lowest in the EU, a proud achievement at just 7.4% this year. It is also on track to meet the EU's inflation targets.
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