Estonia Economic Forecast

Estonia Economic Outlook

September 23, 2019

Growth lost considerable pace in the second quarter. Slower total consumption dented domestic demand growth in Q2, as public spending growth came to near a halt and household consumption decelerated sharply, amid intensifying inflationary pressures and a jump in the unemployment rate. That said, fixed investment surged in the quarter, driven by booming private sector activity. On the external front, export growth fell, while import growth jumped—reflecting an upturn in fixed investment—thus weighing on the overall expansion. Turning to Q3, metrics appear largely downbeat. In July, both industrial production and exports contracted for a second consecutive month, while business sentiment fell into pessimistic territory, where it stayed in August. That said, consumer demand was seemingly strong, reflected in booming retail sales in July and a jump in consumer confidence in August.

Estonia Economic Growth

Growth is expected to weaken this year and next, amid a broad-based slowdown. Private consumption growth is seen softening further, weighed on by less upbeat labor market dynamics, while investment activity will lose considerable traction, causing productivity growth to slow. Furthermore, the external sector’s performance will likely be dented by the global slowdown. FocusEconomics analysts see the economy expanding 3.4% this year, before decelerating to 2.6% in 2020, which is up 0.1 percentage points from last month’s forecast.

Estonia Economy Data

Population (million)
GDP per capita (EUR)14,36415,25615,70516,47617,931
GDP (EUR bn)18.920.120.721.723.6
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)1.5-2.6-7.72.912.5
Industrial Production (annual variation in %)
Retail Sales (annual variation in %)
Unemployment Rate-  -  -  -  -  
Fiscal Balance (% of GDP)-
Public Debt (% of GDP)
Money (annual variation in %)6.79.911.69.55.8
Inflation Rate (CPI, annual variation in %, eop)1.4-0.5-
Inflation Rate (HICP, annual variation in %)
Inflation (PPI, annual variation in %)4.1-1.6-2.0-0.73.6
Policy Interest Rate (%)-  -  -  -  -  
Exchange Rate (vs USD)-  -  -  -  -  
Exchange Rate (vs USD, aop)1.331.331.111.111.13
Current Account (% of GDP)
Current Account Balance (EUR bn)
Trade Balance (EUR billion)-0.9-1.0-0.9-0.8-0.8
Exports (EUR billion)
Imports (EUR billion)11.912.011.612.112.8
Exports (annual variation in %)2.00.5-
Imports (annual variation in %)-1.11.1-

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Estonia Facts

Exchange Rate1.100.65 %Sep 04
Stock Market1,235-0.38 %Sep 04

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