Tallinn - Officials at the Estonian central bank, Eesti Pank, said Wednesday that the country could meet the Maastricht criteria for euro adoption by the end of the year, but needs to work harder on reducing its budget deficit.
'When the spring forecast of Eesti Pank was being prepared, changes in the tax policy were not yet under consideration, thus we concluded the consumer basket would cheapen by 0.2 per cent as an annual average.'
'But now, as a result of the increased VAT rate, prices will, after all, rise by 0.5 per cent year-on-year,' the central bank said in a new overview of recent developments and future outlook.
'It is very likely that meeting the Maastricht inflation criterion will become possible in the final quarter of the year,' it added.
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Estonian central bank warns on budget deficit