Estonia Economic Forecast

Estonia Economic Outlook

May 31, 2022

Q1 GDP likely grew at a healthy annual pace. However, the expansion will have been slower than in Q4, and the economy likely registered a contraction in quarter-on-quarter terms. Looking at available indicators, industrial activity in January–March grew at a softer year-on-year pace than in Q4. Meanwhile, retail sales growth also eased amid the red-hot inflation rate and the Omicron wave, although a tight labor market, government aid and pent-up savings likely sheltered spending somewhat. In Q2, industrial activity is likely suffering from global commodity market shocks: Producer prices in April were at a 27-year high. That said, entry requirements for international travelers were eased on 1 April, which should be supporting tourism. In May, Estonia adopted a nearly EUR 900 million supplementary budget for defense spending, energy security and refugee aid, which should boost domestic demand.

Estonia Economic Growth

In 2022, economic growth is set to slow notably from last year’s rally, owing to inflation stifling private spending and the fallout from the Ukraine war hampering trade and industrial activity. Still, incoming EU funds, a robust labor market and major growth in military spending will support growth. Energy insecurity and slowdowns among trading partners cloud the outlook. FocusEconomics analysts see the economy growing 2.3% in 2022, which is down 0.4 percentage points from last month’s forecast, and 3.0% in 2023.

Estonia Economy Data

2015 2016 2017 2018 2019
Population (million)1.31.31.31.31.3
GDP per capita (EUR)15,80416,48518,05319,73921,257
GDP (EUR bn)20.821.723.826.028.0
Economic Growth (GDP, annual variation in %)1.82.65.74.84.3
Consumption (annual variation in %)4.94.52.74.23.2
Investment (annual variation in %)-3.20.812.51.713.4
Industrial Production (annual variation in %)0.33.44.04.0-2.3
Retail Sales (annual variation in %)8.05.63.61.04.0
Unemployment Rate-  -  -  -  -  
Fiscal Balance (% of GDP)0.1-0.5-0.8-0.6-0.3
Public Debt (% of GDP)10.010.29.38.48.4
Money (annual variation in %)11.69.55.810.59.5
Inflation Rate (CPI, annual variation in %, eop)-0.92.23.43.41.8
Inflation Rate (HICP, annual variation in %)0.10.83.73.42.3
Inflation (PPI, annual variation in %)-2.0-0.73.62.6-0.2
Policy Interest Rate (%)-  -  -  -  -  
Exchange Rate (vs USD)-  -  -  -  -  
Exchange Rate (vs USD, aop)1.111.111.131.181.12
Current Account (% of GDP)1.81.72.72.02.8
Current Account Balance (EUR bn)0.40.40.60.50.8
Trade Balance (EUR billion)-0.9-0.8-0.8-1.0-0.8
Exports (EUR billion)10.711.312.012.713.4
Imports (EUR billion)11.612.012.913.714.2
Exports (annual variation in %)-3.05.66.55.85.0
Imports (annual variation in %)-3.74.16.86.63.5

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Estonia Facts

Value Change Date
Exchange Rate1.120.65 %Dec 31

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