Estonia met inflation criteria for euro in November

Estonia met the inflation criterion for euro entry in November and is on the road to adopting the currency by 2011, the central bank said.

Bloomberg quoted Martin Lindpere, an economist with the central bank, saying today that the 12-month average inflation rate harmonized to European Union terms rate was about 1.0 percent in November. Consumer prices slid 2.1 percent from a year earlier in November, following a record 2.2 percent decline in October.

Estonia hopes to become the euro region's next member. Euro applicants need to keep price growth within 1.5 percentage points of the 12-month average inflation rate of the three EU nations with the slowest annual price growth. The reference value was 1.7% in October.

Estonia "definitely" met the inflation criterion, the Finance Ministry said in a separate statement today.

Euro hopefuls must also keep the budget deficit below 3 percent of gross domestic product this year, a likely problem in the coming years as governments spend to pull their economies out of the recession.

Estonia's government plans to raise taxes on alcohol, fuel and electricity at the beginning of 2010 to keep the euro goal on track, the central bank said.

Applicants for Europe's common currency must also meet debt and currency stability criteria.

Source: balticbusinessnews.com