Bloomberg confirmed this month that Estonia's economic growth has topped the charts at 12 percent. China placed second with growth of 11.3 percent and Latvia at 11.2 percent.
In the current economic circumstances, an appropriate growth for Estonia would be 7.0 to 8.0 percent a year," Bank of Estonia advisor Andres Saarniit said in a statement.
"Exceptionally high growth in the construction sector, the increasing foreign trade deficit and the growth indicators of the retail sector point to the fact that the rapid growth is increasingly based on domestic demand," Saarnit said. "We don't see things changing to allow for more balanced development, which we have been hoping for," he added.
Accordingly, while processing my loan request, HansaBank announced to me today that they are increasing their spread over Eurobor from 1.75 percent to 2.5 percent "across the board". My banker also mentioned to me that the credit officers are "stressed out" because of the piles of loans they are in the process of reviewing.
Now that the economy is white hot banks have decided to tighten their lending policies after years of nearly free money. Amazing what a difference a year makes.
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