The Estonian economy is expected to contract 8.5% this year, the Finance Ministry reported Tuesday. This was much weaker than the 3.5% decline estimated earlier.

According to Finance Minister, Ivari Padar the possibilities of joining euro and budget policy in longer term have to be reviewed in the light of new forecast.

In February, the Bank of Estonia estimated real economy to decline 5.5% this year. The central bank expects economic growth and external demand to start recovery in 2010.

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