OREANDA-NEWS. The state of the Estonian economy is changing from abnormal to normal, the minister for economic affairs told journalists at the presentation of the six-month prognosis drawn up by the Institute of Economic Research, reported the Official website http://web-static.vm.ee.

"All that we have seen - a real estate price hike, wage reforms and daring repurchase of the railway - is the level of Azerbaijan, around 30 percent annual economic growth. We are reverting from abnormal to normal," Juhan Parts said. In Parts' words, Estonia must brace itself for the closure of a part of enterprises and their employees having to retrain.

"In the conditions of competition one needs to change, import of labor would be giving in to competition conditions and the state needs to exercise caution in this regard," the minister said. All in all, the minister viewed the economic slowdown as a good and sobering trend.

Estonia's budget surplus depends on the revenue projection to be ready by the end of August and the course of budget negotiations, Finance Minister Ivari Padar said in a comment on a rating agency recommendation to increase the surplus.

"Estonia's budget policy remains one of the most conservative in the EU and the country's fresh budget strategy (for 2008-2011) for the first time includes the target of bringing in budgets with a surplus," Padar told BNS through a spokesperson. It (the surplus) will definitely not be smaller than planned in the budget strategy."

On 5 July The Estonian government approved income tax-related changes to bring the country's taxation system into line with the EU's parent-subsidiary directive and harmonize the taxation of private individuals' income from securities with that applied to companies.

Finance Minister Ivari Padar said at the governmental press conference that reinvested corporate profit will remain tax-exempt. The amendments in preparation would at the same time exclude double taxation of profit in different EU countries.

Full report you can see here: http://web-static.vm.ee/static/failid/469/Economy_July2007.pdf