Estonia has slashed this year’s growth forecast from 5.2 per cent to 3.7 per cent, raising fears that the once overheating Baltic economies are now cooling too rapidly.

The finance ministry on Thursday cut its 2008 growth forecast even below that of most economists, predicting almost a halving of growth from last year’s 7.1 per cent, itself a substantial slowdown from 2006’s 11.2 per cent.