Estonia Economic Outlook
May 5, 2020Strict measures imposed to contain the spread of Covid-19 seem to have dealt a blow to the economy at the end of Q1 onwards. Both consumer and business sentiment dived in March and again in April, signaling a severe contraction in private sector activity. Furthermore, industrial output and merchandise exports likely plunged again in the same period, after shrinking in Januaryâ€“February, as foreign demand dried up. Turning to Q2, economic activity appears to be increasingly hampered by lockdown measures after the government announced the state of emergency on 13 March. That said, schools are set to begin opening from 5 May as lockdown measures ease. In further positive news, Fitch Ratings affirmed Estonia's AA credit rating and kept a stable outlook on 30 March, praising the countryâ€™s response to the health crisis: On 19 March the government approved a EUR 2.0 billion support packageâ€”equivalent to nearly 7.0% of its GDPâ€”for businesses and workers.
Estonia Economic GrowthOur panelists slashed their forecasts again this month and expect the economy to contract sharply this year. Domestically, fixed investment and household spending are set to be particularly hard hit, while a collapse in foreign demand will likely undercut exports. A jump in public spending should soften the overall downturn somewhat, however. FocusEconomics analysts see the economy contracting 6.6% in 2020, which is down 3.3 percentage points from last monthâ€™s forecast. In 2021, GDP is seen rebounding and increasing 5.3%.
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Estonia Economic News
April 10, 2020
Industrial output fell 0.2% in annual working-day-adjusted terms in February, following a sharp 11.7% contraction in the opening month of the year and marking the softest contraction in output since May 2019.
April 7, 2020
Consumer prices in March fell 0.7% over the previous month, contrasting February’s 0.5% month-on-month increase and marking the sharpest contraction in over four years.
March 10, 2020
Industrial output dived 11.2% in annual working-day-adjusted terms in January, following a 10.0% year-on-year contraction recorded in the closing month of last year.
March 6, 2020
Consumer prices rose 0.5% over the previous month in February, following a 0.4% month-on-month decrease at the outset of the year and marking the first increase in six months.
February 28, 2020
GDP growth slowed to 3.9% in annual terms in the fourth quarter, according to a comprehensive estimate released by Estonia’s Statistical Institute on 28 February.