Analytics, Economics, Estonia

"Like other countries in the region, Estonia has been severely affected by the world financial crisis," International Monetary Fund official Christoph Rosenberg said in a statement after a team from the global lender wrapped up a mission to the Baltic state.

"We presently project output to contract by 13% this year and the recovery to start in late 2010 at the earliest, depending in part on global developments," he added.

Estonia, which regained independence from the crumbling Soviet bloc in 1991, had enjoyed a reputation as a "tiger" in the European Union, which it joined in 2004.

Estonia posted 9.2% growth in 2005, 10.4% in 2006 and 6.3% in 2007, but plunged into recession last year as rampant inflation dented consumption and the global economic crisis battered exports of goods and services.

Output in the country of 1.3 million people contracted by 3.6% last year and Estonian authorities forecast it could shrink by 15.3% this year. For 2010, Estonia's central bank has forecast modest growth of 0.2-1.2%, but said its worst case scenario foresaw a 4.6% slump.