Search

 

Cablegate: Estonia's Q2 Gdp Falls 16.6 Percent, but Fall Is Slowing

VZCZCXRO2574
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSL RUEHSR RUEHVK
RUEHYG
DE RUEHTL #0245 2261220
ZNR UUUUU ZZH
R 141220Z AUG 09
FM AMEMBASSY TALLINN
TO RUEHC/SECSTATE WASHDC 0083
INFO EUROPEAN POLITICAL COLLECTIVE
RUEHTL/AMEMBASSY TALLINN

UNCLAS TALLINN 000245

SIPDIS
FOR EUR/NB

E.O. 12958: N/A
TAGS: ECON EFIN ETRD PGOV EN
SUBJECT: Estonia's Q2 GDP Falls 16.6 Percent, but Fall is Slowing

1. According to Statistics Estonia, Estonia's GDP fell 16.6 percent
year-on-year in the second quarter in 2009. Most of the decrease
can be explained by reduced manufacturing, construction, wholesale
trade, and financial intermediation. The good news is, the drop in
GDP seems to be slowing. GDP fell by 3.7 percent
quarter-on-quarter, compared to 6.1 percent in the first quarter of
the year. Analysts at two of Estonia's largest banks, SEB and
Swedbank, expect the GDP decline to level off in the third quarter.
SEB predicts that while cuts in government spending will put
downward pressure on GDP this quarter, this pressure could be
alleviated by a slight increase in consumption.

2. Statistics Estonia also released Q2 job figures, which show that
unemployment worsened, but at a decreasing rate. Unemployment for
the quarter was 13.5 percent, compared to 11.4 percent in Q1.
However, Q1 saw 26,000 people lose their jobs, compared to 13,000
newly unemployed in Q2. Officially, Estonia now has 593,000
employed persons, and 92,000 unemployed. Employment levels fell
the most in the construction field, where one in three workers lost
their jobs, while employment grew slightly in the manufacturing
sector. Underemployment also increased, from 3,000 people at the
beginning of the year to 15,000 at the end of Q2.

3. Comment: The Prime Minister continues to stress that the GOE's
main goal for the near future is to meet the Maastricht Criteria to
join the Euro zone. Estonia hopes to be allowed to adopt the Euro
on January 1, 2011. Estonia is doing well on most of the criteria,
but the declining GDP is making it hard for the government to keep
its annual deficit below 3 percent. Having run budget surpluses
for most of the decade, Estonia has already had to cut government
spending twice this year and raise VAT to try and limit the annual
deficit. Swedbank believes that a third round of budget cutting,
reducing at least another EEK two billion [USD 182.5 million], will
be needed. So far, polling indicates the majority of Estonians
support the PM's plans to join the Euro, though this support will
be tested in the run-up to local elections on October 18.
DECKER

© Scoop Media

 
 
 
World Headlines

 


WMO: Another La Niña Impacts Temperatures And Precipitation – But Not Climate Change
La Niña has developed for the second consecutive year and is expected to last into early 2022, influencing temperatures and precipitation. Despite the cooling influence of this naturally occurring climate phenomenon, temperatures in many parts of the world are expected to be above average because of the accumulated heat trapped in the atmosphere...
More>>


UN: Violations Of Palestinian Rights Puts Two-State Solution At Risk, Chief Warns
The situation in the Occupied Palestinian Territory, including East Jerusalem, continues to pose a significant challenge to international peace and security, United Nations Secretary-General, António Guterres, said on Monday... More>>



Oxfam: Afghanistan Faces Multiple Crises

ActionStation, Amnesty International Aotearoa New Zealand, Christian World Service, Oxfam Aotearoa and World Vision New Zealand say that while Afghanistan faces chronic poverty, persistent droughts, war, the Covid-19 pandemic and an economic crisis, winter is about to bring a whole new set of challenges...More>>




World Food Programme: Millions More In Need Of Food Assistance As A Direct Result Of Conflict In Northern Ethiopia

The number of people in need of humanitarian food assistance across northern Ethiopia has grown to an estimated 9.4 million as a direct result of ongoing conflict, the United Nations World Food Programme (WFP) announced today... More>>


Food: Three Billion People Cannot Afford A Healthy Diet

Approximately three billion people, almost 40 per cent of the world’s population, cannot afford a healthy diet and another one billion people would join their ranks should further unpredictable events reduce incomes by one-third, the UN food agency said, launching a new report on Tuesday... More>>

COP26: Enough Of ‘Treating Nature Like A Toilet’ – Guterres Brings Stark Call For Climate Action To Glasgow
As the World Leaders Summit opened on day two of COP26, UN chief António Guterres sent a stark message to the international community. “We are digging our own graves”, he said, referring to the addiction to fossil fuels which threatens to push humanity and the planet, to the brink, through unsustainable global heating... More>>