Today the IMF mission completed their visit in Estonia, which included meetings with the Prime Minister, the Minister of Finance, the Governor and Executive Board of Eesti Pank, as well as with credit managers of commercial banks.

Members of the mission said Estonia's economic development of 2005 had been successful. Growth, which accelerated to around 10%, was mainly supported by strong investment and an export boom. In addition, it was pointed out that a pick-up in the private sector saving rate and a strong fiscal position contributed to a large decline in the current account deficit. Members of the mission consider this a significant turnaround, which followed several years of widening deficits. The fact that the unemployment rate moved below 8 per cent for the first time in ten years also found acknowledgement.

The Estonian representatives confirmed the significance of the adoption of the euro to Estonia's economy. Members of the IMF mission said EMU membership would bring clear benefits to the country. They pointed out that the changeover to the single currency would facilitate further economic integration, reduce transaction costs, and eliminate the risks associated with having a separate currency.

Estonian representatives also spoke about the complications accompanying the meeting of the Maastricht inflation criterion. In this respect, the authorities have prepared a set of measures, which aim to fulfil the criterion in the first half of 2007. These measures include reprogramming the excise tax increases and keeping the fiscal stance as tight as possible. The IMF representatives agreed that both the objective to adopt the euro and the measures proposed to achieve the objective are appropriate. In addition, they urged Estonia to target a fiscal surplus at least as large as that of 2005.

In the Concluding Statement, the IMF mission members emphasised that generally, Estonia's position to join the EMU is favourable and the country would definitely benefit from the membership.

As the head of the IMF Mission to Estonia changed, the new IMF head of mission, Franciszek Rozwadowski, paid a visit to Estonia from 31 March to 5 April. Richard Haas, who had been in charge of the mission to Estonia since 2002, also participated in the meetings.

The Concluding Statement of the mission is available on the web page of Eesti Pank at: www.bankofestonia.info.