Estonia Economic Outlook
September 28, 2021Economic growth gained considerable steam in Q2, with activity surpassing pre-pandemic levels, with improvements in both private consumption and fixed investment leading the uptick. That said, the result was supported by a favorable base effect. Moving on to Q3, available data is mixed: Both economic and consumer sentiment improved from Q2’s average in July–August, but both retail sales and industrial production lost steam in July. In other news, Fitch Ratings affirmed Estonia’s AA- rating with a stable outlook on 3 September, highlighting the country’s sound public finances but warning against its fragility to external shocks. Meanwhile, on 23 September the government approved the outlined state budget for 2022, which sees the deficit falling to less than 3% of GDP. The draft budget must be sent to parliament for approval by the end of September.
Estonia Economic GrowthAfter robust activity sees economic growth return to its pre-pandemic level in 2021, momentum should remain upbeat in 2022. Although the base effect will fade, growth will be fueled by incoming EU funds, together with falling unemployment and growing wages. That said, uncertainty regarding the pandemic and border tensions with neighboring Belarus pose downside risks. FocusEconomics analysts see the economy growing 7.2% in 2021 and 4.4% in 2022, which is up 0.1 percentage points from last month’s forecast.
Estonia Economy Data
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Estonia Economic News
Estonia: Inflation comes in at highest level since December 2008 in September amid higher electricity prices
October 7, 2021
Consumer prices rose 1.22% in September over the previous month, picking up from August's 0.72% rise.
September 9, 2021
Consumer prices rose 0.72% in August over the previous month, moderating from July's 1.09% increase.
September 2, 2021
Industrial output expanded 9.9% year-on-year in seasonally- and calendar-adjusted terms in July, which followed June's 10.8% increase.
Estonia: GDP growth records best reading since Q4 1997 in Q2, partly supported by a favorable base effect
August 31, 2021
GDP growth gained traction to 12.9% year-on-year in the second quarter, from 4.1% in the first quarter.
August 9, 2021
Consumer prices increased 1.09% in July over the previous month, slowing from the 1.17% increase recorded in June.