{
  "title": "Press Release: IMF Approves US$39 Million Stand-By Credit for Estonia",
  "publication": "IMF News, March 1, 2000",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/14/01/49/pr0014",
  "canonical": "https://www.imf.org/en/news/articles/2015/09/14/01/49/pr0014",
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  "summary": "IMF approved an 18-month stand-by credit for Estonia in an amount equivalent to SDR 29.34 million (about US$39 million) to support the government's 2000-2001 economic program.",
  "publishDate": "2000-03-01",
  "sections": [
    {
      "heading": "IMF arrangement and terms",
      "content": "- IMF approved an 18-month stand-by credit for Estonia in an amount equivalent to SDR 29.34 million (about US$39 million) to support the government's 2000-2001 economic program.\n- Estonia will treat the stand-by credit as precautionary and does not intend to draw on it.\n- Estonia joined the IMF on May 26, 1992, and its quota is SDR 65.2 million (about US$87 million).\n- Estonia's outstanding use of IMF financing currently totals SDR 17 million (about US$23 million)."
    },
    {
      "heading": "Executive Board statement (Shigemitsu Sugisaki)",
      "content": "- Authorities committed to a comprehensive and well-balanced program for maintaining macroeconomic stability and completing structural reforms to support recovery and medium-term sustained growth while safeguarding the external position.\n- The program is precautionary; Estonia has not used Fund resources under three earlier arrangements.\n- Key policy components highlighted:\n  - Phase out discretionary fiscal stimulus provided in 1999.\n  - Target a fiscal deficit of 1¼ percent for 2000.\n  - Reduce the size of government expenditures relative to GDP over time; general government expenditures to remain broadly frozen in real terms in 2000, including keeping pensions and public sector wages broadly unchanged after large increases in 1999.\n  - Strict adherence to the currency board arrangement as the cornerstone of policy.\n  - Continue sound fiscal policy, safeguard financial sector stability, continue structural reforms, maintain labor market flexibility, and adopt a cautious approach to foreign borrowing.\n  - Strengthen banking system through consolidation, enhanced supervision, foreign investor participation, and strengthened bank management.\n  - Complete structural reforms to meet all EU accession requirements by early 2003, focusing on public administration, the pension system, privatization of remaining large infrastructure state enterprises, and addressing oil-shale mining and electricity generation issues."
    },
    {
      "heading": "Macroeconomic outlook and projections",
      "content": "- Context:\n  - Estonia suffered a steep downturn after the August 1998 Russian crisis; growth resumed in the second half of 1999 and appears to be accelerating.\n  - The downturn sharply cut the current account deficit by contracting private sector demand.\n- Growth projections (as stated in the text):\n  - Real GDP growth is expected to accelerate to about 4% in 2000 and to about 6% in 2001, from negative levels in 1999.\n- Tabled real GDP growth (year-on-year in percent):\n  - 1996: 3.9\n  - 1997: 10.6\n  - 1998: 4.0\n  - 1999: -1.3\n  - 2000: 6.0\n- Inflation and monetary policy:\n  - Authorities do not target inflation rates under the currency board arrangement.\n  - Forecasted moderate increase in both CPI and GDP inflation due to recovery and increases in indirect taxes.\n  - Bank of Estonia to continue adhering to currency board requirements and abstain from providing credit to government or banking system; Bank of Estonia does not set interest rates nor aim at credit or money supply targets.\n  - Recent recovery of broad money growth viewed as healthy."
    },
    {
      "heading": "Fiscal policy objectives and measures",
      "content": "- Fiscal targets:\n  - Reduce budget deficit to 1.25% of GDP in 2000.\n  - Eliminate the deficit altogether in 2001.\n  - From a deficit of 4.8% of GDP in 1999.\n- Key elements of the 2000 budget:\n  - Hold on pensions and public sector wages.\n  - Abolition of the corporate profit tax.\n  - Compensating increases in other taxes."
    },
    {
      "heading": "Structural reform agenda",
      "content": "- Estonia remains a leader among transition countries in the pace of structural reforms.\n- Program's structural reform priorities:\n  - Privatization and restructuring of the few remaining major infrastructure firms.\n  - Improved supervision over financial markets through eventual introduction of a unified supervision agency.\n  - Reform of public administration.\n  - Reform in pension and health areas.\n  - Legal and institutional reforms driven by objective of meeting all European Union accession requirements by January 1, 2003."
    },
    {
      "heading": "Financial sector and external position",
      "content": "- Banking sector:\n  - Material strengthening via consolidation, enhanced supervision, foreign investor capital and liquidity support, and strengthened bank management.\n- External and reserve indicators (selected):\n  - Gross international reserves (In millions of U.S. dollars):\n    - 1996: 640\n    - 1997: 760\n    - 1998: 815\n    - 1999: 856\n    - 2000: 858\n    - 2001: 918\n  - Trade balance (in millions of U.S. dollars):\n    - 1996: -1,021\n    - 1997: -1,128\n    - 1998: -1,117\n    - 1999: -770\n    - 2000: -803\n    - 2001: -928\n  - Exports (in millions of U.S. dollars):\n    - 1996: 1,814\n    - 1997: 2,297\n    - 1998: 2,684\n    - 1999: 2,467\n    - 2000: 2,576\n    - 2001: 2,824\n  - Imports (in millions of U.S. dollars):\n    - 1996: -2,834\n    - 1997: -3,426\n    - 1998: -3,801\n    - 1999: -3,237\n    - 2000: -3,379\n    - 2001: -3,752\n  - Current account (in millions of U.S. dollars):\n    - 1996: -399\n    - 1997: -563\n    - 1998: -480\n    - 1999: -209\n    - 2000: -285\n    - 2001: -343\n  - Gross external debt/GDP (in percent):\n    - 1996: 25.5\n    - 1997: 46.8\n    - 1998: 45.1\n    - 1999: 39.3\n    - 2000: 34.6\n  - Net external debt/GDP (in percent):\n    - 1996: 33.1\n    - 1997: 33.3\n    - 1998: 30.8"
    },
    {
      "heading": "Selected macroeconomic indicators (high-level)",
      "content": "- Nominal GDP (in millions of kroons):\n  - 1996: 52,446\n  - 1997: 64,324\n  - 1998: 73,213\n  - 1999: 74,310\n  - 2000: 80,036\n  - 2001: 87,115\n- GDP (in millions of U.S. dollars):\n  - 1996: 4,357\n  - 1997: 4,637\n  - 1998: 5,209\n  - 1999: 5,055\n  - 2000: ...\n- Average CPI (year-on-year change in percent) 1/ 2/:\n  - 1996: 23.1\n  - 1997: 11.2\n  - 1998: 8.2\n  - 1999: 3.3\n  - 2000: 4.6\n  - 2001: 3.0\n- 12-month CPI (end-of-period change in percent) 1/ 2/:\n  - 1996: 14.8\n  - 1997: 12.5\n  - 1998: 4.4\n  - 1999: 4.8\n  - 2000: 2.4\n- GDP deflator (year-on-year change in percent):\n  - 1996: 24.0\n  - 1997: 10.9\n  - 1998: 9.4\n  - 1999: 2.9\n  - 2000: 3.5\n  - 2001: 2.7\n- Average monthly wage (end-of-period, in U.S. dollars):\n  - 1996: 291\n  - 1997: 318\n  - 1998: 360\n  - 1999: 347\n  - 2000: 377\n  - 2001: 412\n\nSource: Press Release: IMF Approves US$39 Million Stand-By Credit for Estonia (March 1, 2000).\n\n---\n\n\n References\n\n- Republic of Estonia and the IMF\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr0014"
    }
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    "Published: March 1, 2000",
    "IMF approved an 18-month stand-by credit for Estonia in an amount equivalent to SDR 29.34 million (about US$39 million) to support the government's 2000-2001 economic program.",
    "Estonia will treat the stand-by credit as precautionary and does not intend to draw on it.",
    "Estonia joined the IMF on May 26, 1992, and its quota is SDR 65.2 million (about US$87 million).",
    "Estonia's outstanding use of IMF financing currently totals SDR 17 million (about US$23 million).",
    "Authorities committed to a comprehensive and well-balanced program for maintaining macroeconomic stability and completing structural reforms to support recovery and medium-term sustained growth while safeguarding the external position.",
    "The program is precautionary; Estonia has not used Fund resources under three earlier arrangements.",
    "Key policy components highlighted:",
    "Context:",
    "Growth projections (as stated in the text):",
    "Tabled real GDP growth (year-on-year in percent):",
    "Inflation and monetary policy:",
    "Fiscal targets:",
    "Key elements of the 2000 budget:",
    "Estonia remains a leader among transition countries in the pace of structural reforms.",
    "Program's structural reform priorities:",
    "Banking sector:",
    "External and reserve indicators (selected):",
    "Nominal GDP (in millions of kroons):",
    "GDP (in millions of U.S. dollars):",
    "Average CPI (year-on-year change in percent) 1/ 2/:",
    "12-month CPI (end-of-period change in percent) 1/ 2/:",
    "GDP deflator (year-on-year change in percent):",
    "Average monthly wage (end-of-period, in U.S. dollars):",
    "[Republic of Estonia and the IMF](http://www.imf.org/external/country/EST/index.htm)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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