Downside Risks To Current Account Surplus

We hold to our forecast for Estonia to post a 6.0% of GDP current account surplus in 2010, though we caution that there are major downside risks to this forecast. Despite the fact that our view for continued financial account capital outflows has played out through the early part of the year, import values have surged back much stronger than originally anticipated. We stress though, that this is likely due to the depreciation of the euro in H110 and the continued high level of commodities prices as opposed to any fundamental improvement in local demand.

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