Estonia’s Parliament approved next year’s budget, targeting the first deficit in three years amid fears Europe’s sovereign debt crisis will weigh on economic growth more than forecast. Lawmakers voted 55-44 to back the budget in the final of the three readings in the capital, Tallinn, today. The budget is based on a 2012 forecast for gross domestic product growth of 3 percent and sets a deficit of 2.1 percent, compared with a planned surplus of 0.2 percent this year. The budget maintains Estonia’s fiscal prudence, while stimulating the economy of the euro area’s newest member through one-time measures, according to Prime Minister Andrus Ansip. The central bank and the opposition have in recent months called on the Cabinet to trim spending to reflect the Finance Ministry’s risk scenario which envisages 1 percent GDP growth next year. Estonia, the fastest-growing economy in the 27-member European Union this year, should brace for slowing export growth and weaker business and consumer confidence next year because of the debt crisis, the International Monetary Fund said on Nov. 29. Still, it forecast a 2012 GDP rise of 3.1 percent, while the Organization for Economic Cooperation and Development expects 3.2 percent growth, according to a forecast released on Nov. 28.
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